Global IS and the Value Chain David Kroenke Using MIS 3e Part 3: The International Dimension

06:38 Copyright © 2011 Pearson Education, Inc. Publishing as Prentice HallID3-2 Q1 How do global information systems benefit the value chain? Q2 What are the challenges of international business process management? Q3 How does Web 2.0 affect international business? Q4 How do global information systems affect supply chain profitability? Q5 What is the economic impact of global manufacturing? Q6 Should information systems be instruments for exporting cultural values? Study Questions

06:38 Copyright © 2011 Pearson Education, Inc. Publishing as Prentice HallID3-3 Activities can be performed anywhere in the world  Sales and marketing can be local  Manufacturing can be distributed throughout the world  Service and support functions can be outsourced to less costly areas Integrated into worldwide system World time differences enable global companies to operate 24/7 Abundance of low-cost, well-educated, English- speaking professionals in India, many organizations have chosen to outsource their service and support functions to India. Some accounting functions are outsourced to India as well. Global Information Systems Benefit the Value Chain

06:38 Copyright © 2011 Pearson Education, Inc. Publishing as Prentice HallID3-4 Differences in language, culture, norms, and expectations compound difficulties of international process management. In the future, international business processes will be developed more like interorganizational business processes. A high-level process will be defined to document service responsibilities of each international unit. Then SOA standards will be used to connect those services into an integrated, cross- functional, international system. Because of encapsulation, only obligation of an international unit will be to deliver its defined service. Global Information Systems Benefit the Value Chain

06:38 Copyright © 2011 Pearson Education, Inc. Publishing as Prentice HallID3-5 Q1 How do global information systems benefit the value chain? Q2 What are the challenges of international business process management? Q3 How does Web 2.0 affect international business? Q4 How do global information systems affect supply chain profitability? Q5 What is the economic impact of global manufacturing? Q6 Should information systems be instruments for exporting cultural values? Study Questions

06:38 Copyright © 2011 Pearson Education, Inc. Publishing as Prentice HallID3-6 Functional systems lack of data integration  Makes accommodations for language and cultural differences unnecessary  Needs adequate data interface to share data Cross-functional integrated systems provide world- wide view  Do not readily accommodate differences in language, business processes, cultural norms  Lose value of integration  Based on ideas of standardization Inherent processes problematic Challenges of International Business Process Management

06:38 Copyright © 2011 Pearson Education, Inc. Publishing as Prentice HallID3-7 Q1 How do global information systems benefit the value chain? Q2 What are the challenges of international business process management? Q3 How does Web 2.0 affect international business? Q4 How do global information systems affect supply chain profitability? Q5 What is the economic impact of global manufacturing? Q6 Should information systems be instruments for exporting cultural values? Study Questions

06:38 Copyright © 2011 Pearson Education, Inc. Publishing as Prentice HallID3-8 Future impact is unknown Web 2.0 may be culturally biased User-generated content also culturally biased May be future business opportunity? Web 2.0 Affect on International Business?

06:38 Copyright © 2011 Pearson Education, Inc. Publishing as Prentice HallID3-9 Q1 How do global information systems benefit the value chain? Q2 What are the challenges of international business process management? Q3 How does Web 2.0 affect international business? Q4 How do global information systems affect supply chain profitability? Q5 What is the economic impact of global manufacturing? Q6 Should information systems be instruments for exporting cultural values? Study Questions

06:38 Copyright © 2011 Pearson Education, Inc. Publishing as Prentice HallID3-10 Supply chain profitability is increased 1.Facilities can be located anywhere. 2.Inventories can be reduced, producing cost savings  Reduce or eliminate bullwhip effect  Support JIT 3.Transportation can be selected to optimize value.  Select method of delivery  Automated systems track shipments 4.Produce comprehensive, accurate, and timely information. Global Information Systems Affect on Supply Chain Profitability?

06:38 Copyright © 2011 Pearson Education, Inc. Publishing as Prentice HallID3-11 Q1 How do global information systems benefit the value chain? Q2 What are the challenges of international business process management? Q3 How does Web 2.0 affect international business? Q4 How do global information systems affect supply chain profitability? Q5 What is the economic impact of global manufacturing? Q6 Should information systems be instruments for exporting cultural values? Study Questions

06:38 Copyright © 2011 Pearson Education, Inc. Publishing as Prentice HallID3-12 Modern manufacturing reduces prices of goods Due to “accelerator effect,” increases incomes and demand Globally:  Buying in another country will generate accelerator effect in that country, increasing demand for goods.  Decreases economic activity in purchaser’s country, but may be balanced by increased demand for goods Economic Impact of Global Manufacturing?

06:38 Copyright © 2011 Pearson Education, Inc. Publishing as Prentice HallID3-13 Q1 How do global information systems benefit the value chain? Q2 What are the challenges of international business process management? Q3 How does Web 2.0 affect international business? Q4 How do global information systems affect supply chain profitability? Q5 What is the economic impact of global manufacturing? Q6 Should information systems be instruments for exporting cultural values? Study Questions

06:38 Copyright © 2011 Pearson Education, Inc. Publishing as Prentice HallID3-14 Information systems do export cultural values. When an organization installs an ERP system, it installs inherent processes. According to ERP vendors, everyone ultimately benefits, because these processes encode each industry’s “best practices.” But what is deemed a best practice depends heavily on culture. Speed and efficiency might be highly valued in one culture, whereas warm and engaging interpersonal relationships might be highly valued in another. The inherent process, however, will simply encode the cultural values of the designers of the system. Should Information Systems Be Instruments for Exporting Cultural Values?

06:38 Copyright © 2011 Pearson Education, Inc. Publishing as Prentice HallID3-15 What about values such as freedom of speech? Chinese government asked MSN to shut down IP support for blog sites it deemed offensive (2006). People on sites criticizing the Chinese government.  Sovereign government China has the right to enact laws as it sees fit. Consider online gambling sites. Most European nations allow online gambling. The United States outlawed online sports betting, and no state has licensed any form of online games of chance. Does the United States want the right to shut down information systems that violate its laws, but disallow other nations from doing the same? Should Information Systems Be Instruments for Exporting Cultural Values?

06:38 Copyright © 2011 Pearson Education, Inc. Publishing as Prentice HallID3-16 Q1 How do global information systems benefit the value chain? Q2 What are the challenges of international business process management? Q3 How does Web 2.0 affect international business? Q4 How do global information systems affect supply chain profitability? Q5 What is the economic impact of global manufacturing? Q6 Should information systems be instruments for exporting cultural values? Active Review

06:38 Copyright © 2011 Pearson Education, Inc. Publishing as Prentice HallID3-17 Brose Group supplies windows, doors, seat adjusters, and related products for more than 40 auto brands. Major customers include General Motors, Ford, DaimlerChrysler, BMW, Porsche, Volkswagen, Toyota, and Honda. Founded as an auto and aircraft parts manufacturer in Berlin in 1908 Company employs more than 13,000 employees in facilities at more than 51 locations in 21 different countries. Revenue for 2008 exceeded 2.8 billion Euros. Brose is privately held by the Brose family. Case 3: The Brose Group Implements SAP—One Site at a Time

06:38 Copyright © 2011 Pearson Education, Inc. Publishing as Prentice HallID3-18 Brose enjoyed rapid growth but found their existing information systems were unable to support the company’s emerging needs. Too many different information systems meant a lack of standardization and hampered communication among suppliers, plants, and customers. Brose decided to standardize operations on SAP R/3, an ERP application licensed by SAP that supports more than a thousand different business processes. Rather than attempt to implement those processes on its own, Brose hired SAP Consulting to lead the project. 1990s

06:38 Copyright © 2011 Pearson Education, Inc. Publishing as Prentice HallID3-19 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2011 Pearson Education, Inc. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall