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2. Discuss the reasons for globalization and for using global information systems, including e-business and Internet growth
Describe global information systems and their requirements and components
Explain the types of organizational structures used with global information systems
Discuss obstacles to using global information systems

3. Customers demand integrated worldwide services
Why Go Global?
Customers demand integrated worldwide services
Expansion of global markets is a major factor in developing global information systems
Requires understanding customs, laws, technological issues, and local business needs and practices

4. Why Go Global?
Global products are becoming increasingly important in international marketing efforts
Manufacturers regionalize operations to make use of advantages available in certain regions
Global organizations reduce costs in purchasing, manufacturing, and distribution
Gain access to cheaper labor
Sell products and services locally and internationally

5. E-Business
Includes revenue generating transactions and buying and selling goods and services
Creates new opportunities for conducting commercial activities
Provides new opportunities for intermediaries
Small businesses can lower costs by replacing internal networks with Internet

6. Part of daily life in most parts of the world
Growth of the Internet
Part of daily life in most parts of the world
Businesses in the global market create websites appealing to global customers
Separate websites are created for each country they operate in

7. Global Information Systems (GIS)
Facilitates communication between headquarters and subsidiaries in other countries
Incorporates technologies and applications found in a typical information system
Gathers, stores, manipulates, and transmits data across cultural and geographic boundaries

8. Global Information Systems (GIS)
Helps international companies:
Increase control over its subsidiaries
Better coordinate their activities and access new global markets
Core function: Strategic planning
Includes control and coordination dimensions
Organizations may use different combinations of the dimensions

9. Global Information Systems (GIS)
Control
Coordination
Centralized architecture for data
Decentralized architecture for data
Standardized definitions
Standardization within departments
Standard formats for reports
Ability to communicate standards to other departments
Defined behaviors for different processes
Collaboration systems
Performance-tracking system
Technologies that support informal communication and socialization

10. Components of a Global Information System
Global database
Challenges
Designing and implementing global database
Currency conversion
Information-sharing technologies
Companies can outsource or customize technologies

11. Components of a Global Information System
Information system manager must:
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
Decide on the type of information-sharing technology they will be using

12. Components of a Global Information System
Differences in language, business methods, and transborder data flow complicates the use of same software in other countries
Transborder data flow (TDF): Restricts types of data that can be captured and transmitted in foreign countries

13. Multinational Corporations (MNCs)
Private organization with assets and operations in at least one country other than its home country
Delivers products and services across national borders
Centrally managed from its headquarters
Operating an MNC globally includes political, foreign exchange, and market risks

14. Requirements of Global Information Systems
Understanding global risks of operating an MNC is critical in international business planning
Classification of GIS based on managerial support
Operational
Tactical
Strategic

15. Requirements of Global Information Systems
GIS should collect, process, and generate information in formats suitable for each type of support
Operational
Global data access
Consolidated global reporting
Communication between headquarters and subsidiaries
Management of short-term foreign exchange risks

16. Requirements of Global Information Systems
Strategic
Strategic planning support
Management of global tax risks

17. Implementation of Global Information Systems
Difficult to implement because:
Countries differ in culture, politics, social and economic infrastructures, and business methods
International policies affect communication and standardization processes
Issues to be addressed by the organization
Business opportunities should be identified in the global marketplace
Organization’s investment in a GIS should be justified

18. Implementation of Global Information Systems
Personnel need to be screened for technical and business expertise
Migration to GIS needs to be coordinated carefully
To design a successful GIS, management has to:
Determine the kind of information global companies need to share
Take into account possible changes in customers’ needs and preferences and global competition

19. Organizational Structures and Global Information Systems
Types of organizations
Multinational
Global
International
Transnational
Organization’s structure determines the architecture of its GIS

20. Multinational Structure
Production, sales, and marketing are decentralized
Financial management remains the parent company’s responsibility
Advantage
Reduces the need for communication between subsidiaries and headquarters
Subsidiaries make decisions on their own

21. 9.1 A Multinational Structure

22. Global Structure (Franchiser)
Uses highly centralized information system
Subsidiaries have less autonomy
Rely on headquarters for all process, control decisions and system design and implementation
Requires extensive communication network
Integration needed to manage production, marketing, and human resources is difficult
Duplicate information systems have to be developed

23. A Global Structure

24. International Structure
Organization operates like a multinational corporation
Subsidiaries depend on headquarters for process and production decisions
Information systems personnel are regularly exchanged among locations
Encourages cooperative culture
Centralization of subsidiaries’ GISs depend on the extent to which they cooperate

25. 9.3 An International Structure

26. Transnational Structure
Parent company and subsidiaries work together
Design policies, procedures, and logistics for delivering products and services to the right market
Headquarters is not set up in a particular country
Regional divisions share authority and responsibility

27. Transnational Structure
Focuses on optimizing supply sources using advantages available in subsidiary locations
GIS requires high standardization and uniformity for global efficiency
Local responsiveness should be maintained

28. 9.4 Transnational structure

29. Attractive for all organizations due to:
Offshore Outsourcing
Organization chooses an outsourcing firm in another country that can provide services and products
Used for information technology tasks
Attractive for all organizations due to:
Widespread availability of the Internet
Improved telecommunication systems
Reduced cost of communication
Increased bandwidth

30. Supported by GIS by providing a global network
Offshore Outsourcing
Supported by GIS by providing a global network
Used by all participants for coordinating development activities

31. Obstacles to Using Global Information Systems
Lack of standardization
Cultural differences
Diverse regulatory practices
Poor telecommunication infrastructures
Lack of skilled analysts and programmers

32. Lack of Standardization
Impedes the development of a cohesive GIS that is capable of sharing information resources across borders
Too much standardization decreases an organization’s flexibility in responding to local preferences
Time zones can pose difficulties
Coordination and planning for variations in local needs are critical for using a GIS

33. Differences in values, attitudes, and behaviors
Cultural Differences
Differences in values, attitudes, and behaviors
Organizations need to look at changing content or images on their websites suiting a particular country
Best addressed with education and training

34. Diverse Regulatory Practices
Applies to policies on business practices and technological use
Problem can be eliminated partly by adopting open-source systems
Involves jurisdiction issues regarding the contents of a GIS
Nature of intellectual property laws and way of enforcement in different countries varies

35. Poor Telecommunication Infrastructures
Companies must consider telecommunication infrastructures of subsidiary countries
Differences in telecommunication systems make consolidation difficult
Web page content with many graphics and animation should be avoided in countries with slow or costly internet access
Differences in standards can cause problems as well

36. Lack of Skilled Analysts and Programmers
Nature of culture and differences in skills in other countries must be considered when forming teams
Cultural and political differences affect cooperative environment needed for global integration
Training and certification programs offered through the Internet can reduce skills gap in developing nations

37. Global information system (GIS)
Global structure
International structure
Multinational corporations (MNCs)
Multinational structure
Offshore outsourcing
Transborder data flow (TDF)
Transnational structure

38. Expansion of global markets is a major factor in developing global information systems to handle integrated services
GIS helps an international company increase its control over its subsidiaries and better coordinate activities, gains access to new global markets
Global database and information-sharing technologies form the components of GIS

39. Types of organizations which do business across national borders
Multinational organizations
Global organizations
International organizations
Transnational organizations
Obstacles to GIS include:
Lack of standardization, and skilled workforce
Differences in culture, and regulatory practices
Poor telecommunication infrastructures