Management Information Systems Islamia University of Bahawalpur Delivered by: Tasawar Javed Lecture 7

Information System For Competitive Advantage Today’s talk Challenges from global Competitor Challenges in developing global information system Knowledge management Dimensions of information

Information System For Competitive Advantage MNC Is a firm that operates across products, markets, nations, and cultures It consist of the parent company and a group of subsidiaries The subsidiaries are geographically dispersed Own unique goals Policies And procedures

Challenges from Global Competitors Outsourcing??? Should not limit thinking of global competitors Professionals and staff working in other countries who compete for the same jobs as those in the host country may also be considered competitors US companies outsourcing to China, Ireland, Scotland, Russia and India The main reason to outsource is economic Chinese labour cost is cheaper than in US Same as in India IBM, one of India’s largest call-center companies At the same time IBM had more than 9,000 employees in India who developed SW systems

The Special Need for Information Processing in an MNC MNC have special need for Information processing and coordination MNC minimize ‘uncertainty’ ‘uncertainty’ is the “difference between the amount of information required to perform the task and the amount of information already possessed by the organization” Most MNC executives recognize that they can cope with their environmental influences by making good use of IT

Need for coordination in an MNC Coordination is key to achieving CA in the global marketplace Companies that are unable to gain strategic control of their worldwide operations and manage them in a globally coordinated manner will not succeed in the international economy MNC are facing more challenges as compare to those who restricts its activities to its home country Improvements in IT, methodology, and communications have made global coordination much easier but it is still big challenge for MNCs

The Advantage of Coordination Flexibility in responding to competitors in different countries & markets Ability to respond in one country- or in a region of a country- to a change in another country Ability to keep abreast of market need around the world Ability to transfer knowledge between units in different countries Reduced overall costs of operation Increased efficiency and effectiveness in meeting customer needs Ability to achieve and maintain diversity in the firm’s products and in how products are produced and distributed All of these advantages are due to reductions in time and cost of communications made possible through use of the firm’s information resources

Challenges in Developing Global IS It’s a challenge to develop IS The term ‘Global Information System’ describes an IS that consist of networks that cross national boundaries Challenges are: Politically imposed Constraints Cultural and communications Barriers Technological problems Lack of support from Subsidiary Managers

Challenges are:…. Politically imposed constraints Political Governments can impose some restrictions It can make difficult for those MNC or It can make easy to operate It can make difficult or easy for parent to include that subsidiary on the network Reason could be: Restriction is limited access to high speed communication Telephone infrastructure is frequently owned and operated by the government, not private firms..

Challenges are:….. Cultural & Communication Barriers Interaction with technology vary among cultures GIS interfaces need to be consistent even as different languages Must offer multiple formats that yield the same functionality It also includes: Restrictions on HW purchases and imports Restrictions on Data Processing Restrictions on data communication

Challenges are…… Technological problems MNCs are often plagued with problems related to the level of technology that exists in subsidiary countries. In some countries; reliable power sources are not available, resulting in frequent power outages Telecommunication circuits often can only transmit data at slow speed, an the transmission quality may be poor. SW can also be a problem; many countries don’t honor SW copyrights Black market SW SW vendors refuses to do business in certain countries

Challenges are….. Managers are also part of problem Some convinced that they can run their subsidiary with out help, They view head office regulations as unnecessary Foreign office and middle line managers may fear being bypassed by the new information links that funnel operational data to the parent MNCs attempt for GISs. It is impossible to finish problems completely

Knowledge Management A firm’s resources consist of: Computer HW Computer SW Information specialists Users Facilities Databases Information All of this activities, acquiring data, processing data into info, using & communication info in the most effective way, and discarding info at the proper time is called Knowledge Management

Dimensions of information Relevancy (relevant to problem) Accuracy (payroll, billing, receivables) Timelines Completeness

Thank you!!! Q&A