2. MIS 648 Lecture 111 MIS 648 Presentation Notes: Lecture 11 The Challenges of Developing Systems Internationally

3. MIS 648 Lecture 112 AGENDA  Introduction to the lecture  Goal of the Lecture  Challenges of International IT Development  Strategies for IT Development

4. MIS 648 Lecture 113 Basic Ideas  Developing global systems is risky  There are solutions, but costly  Managing global development teams is risky  Designing and operating global systems are risky ventures  Certain kinds of systems (ERP mostly) are likely candidates with their own problems

5. MIS 648 Lecture 114 Basic Ideas  Developing global IS is difficult  Strategies are needed to lower risk (which is significant)  Most of what we have to choose from is modeled on existing development strategies  The basic domains of choice are core vs. periphery, custom vs. package and internal vs. external.

6. MIS 648 Lecture 115 Basic Ideas -2  Selection of strategy depends on four sets of characteristics:  Organizational  System  Core/Periphery match  IS Department What else other than the weather could have an influence anyway?

7. MIS 648 Lecture 116 Global IS Development Strategies Development with a multinational design team (MDT) Parallel development (PD) Central development (CD) Core vs. local development (CL) Best-in-Firm Software adoption (BIF) Outsourced custom development (OD) Unmodified package software acquisition (UP) Modified package software acquisition (MP)* * -- in practice all acquired packages are modified to some extent

8. MIS 648 Lecture 117 Why This List?  These eight “strategies” actually overlap significantly and do not include all possible “strategies”  Classification scheme is arbitrary, but useful  Primary tensions affect strategic position of organization  Coherence of team and alignment with co. goals are primary quality and cost factors  In fact, organizations evolve through these strategies over time anyway.

9. MIS 648 Lecture 118 Evolution of Global IT Development Later, elements at the periphery develop their own needs and systems: PD Later, the core and periphery compromise on services implemented: CL In the early corporate stages, all development is handled centrally: CD Next, the firm either adopts best-in- firm (BIF) or puts together a multinatio nal design team Which is really just another way of exercising core control

10. MIS 648 Lecture 119 Evolution…ct’d  Central development first; countered by  Peripheral parallel development; compromised by  Core vs. local development; then negotiated through either  Best-in-firmormultinational design team  But solution might best be brokered through an outside outsourcer or by buying modifiable packages

11. MIS 648 Lecture 1110 Categorizing and Selecting GIS Development Strategies Domestic vs. International Team Package vs. Custom Approach Internal customization External customization Org’l Characteristics Attitudes, constraints structure System Characteristics Commonality, size, technology appl’n type, criticality HQ/Subs. Diffs Technical, requmts, culture IS Dept. Char’stics Maturity, staff skills Global IS Development Strategies See previous list IS Success Schedule, budget, user Source: Akmanilgil&Palvia, “Strategies for Global Information Systems Development: A Critical Analysis”, 2002

12. MIS 648 Lecture 1111 Risk Assessment Risk = Σ (risk factors) Risk Factor = Probability of harmful event * Probability that event will cause harm * Cost of harm. Hurricane in South Florida Hurricane will destroy our data center Cost to us if data center is destroyed

13. MIS 648 Lecture 1112 Risk Assessment Risk Factor = Probability of harmful event * Probability that event will cause harm * Cost of harm. Our exposure this year to this particular risk factor is the product of 0.5, 0.03 and $1,000,000, which is $15,000. Hence we should spend up to $15,000 to counter or reduce this risk. Note: These numbers and values are not static and may change abruptly or over time. All estimates are controversial and subject to debate. Probability of destructive hurricane in any year=0.5 Probability of our data center being destroyed by hurricane = 0.03 Cost to us if data center is destroyed = $1,000,000

14. MIS 648 Lecture 1113 McFarlan’s Risk Analysis  Risk is due to three factors: Size of project, technology gap and project definition stability.  Global projects are all “large”  Global projects are all subject to strong technology strains thus increasing “gap”  Global projects are generally fluid and have multiple parties and interests and are subject to many stresses  Thus global project risk is always “High”.

15. MIS 648 Lecture 1114 So What to Do?  If Risk is High, we need to counter one or all of the three risk factors: P(harmful events) – managed via planning P(harm from harmful events) – managed via toughening,skilling, control Recovery costs – managed by contingency planning, redundancy, control  McFarlan describes these along two dimensions: integration and formalization Know what might happen and its causes Take action to prevent harm from event or failure to react appropriately Have plans in place to repair damage, recover operations

16. MIS 648 Lecture 1115 Management Solutions (á la McFarlan)  Integration (implicit structure)  Internal: team meetings, professional leadership, mutual familiarity  External: user leadership, user communication and direction  Formalization (explicit structure)  Planning: Formal planning methods  Control: Status reviews, change management, organizational learning

17. MIS 648 Lecture 1116 Architectural Solutions: Global Software Teams  One implementation is to create global software teams that work using technology as an intermediary for collaboration.  These are a form of virtual teamwork  Barkhi, Amiri and James investigated factors that lead to successful virtual teams, teams without social presence

18. MIS 648 Lecture 1117 The challenges  Coordination problems  Free Riding  Process losses  Dysfunctions such as role overload, role ambiguity and low individual commitment  Trust is important to persuade individuals to participate in risky activities where they see forces beyond their control (or rather can’t see forces and thus believe them to be beyond their control) IT culture has characteristics that both enhance and disable trust- building traits and activities

19. MIS 648 Lecture 1118 The Nature of Software Development  Unstructured  Non-routine, individualistic, modularized  Intangible  Highly “equivocal” (confusing, multiple meanings)  Negotiated rather than blended individual work

20. MIS 648 Lecture 1119 The Nature of Communication Channels  Media Richness Theory (Daft & Lengel)  Defined on the basis of feedback cues, language variety and personal focus  Rich channels reduce confusion  Non-routine tasks require richness  Unstructured tasks require flexible, agile channel use, with high information content  Intangibility requires richness of expression

21. MIS 648 Lecture 1120 Hence…  P1 Software development team participants are more likely to collaborate with co-located members than remote members  P2 Software development team participants are more likely to break communication links with remote members than with co-located members.

22. MIS 648 Lecture 1121 Coordination Needs  Coordination is critical in software development; otherwise there can be inconsistency due to divergence, causality violation and intention violation.  Coordination can be mechanistic (formal, centralized, controling) or organic (informal, decentralized, cooperative)  Thus CMC environment poses consistency challenges Work executed at different sites is likely to have different a lot of variety Lack of understanding what is causing what based on messages. Lack of understanding of what is intended based on what is noticed.

23. MIS 648 Lecture 1122 Hence…  P3 Software development team participants perceived more difficulty in coordinating their activities with remote members than co-located members.

24. MIS 648 Lecture 1123 Life-Cycle Effects  Groups go through forming, storming, norming and performing stages.  Consensus is important for productivity  Early and latest stages require rich channels for the negotiation, without which there can be individualistic, un- trusting behavior.

25. MIS 648 Lecture 1124 Group Life Cycle Group Effectiveness Time, Investment Forming Storming Performing Norming Putting the group together, learning about function Adjusting to one another’s styles, determining diff’s Developing agreed rules for process to meet goals Actually getting business done effectively

26. MIS 648 Lecture 1125 Hence…  P4 Participants are more likely to shift blame to their remote members than co- located members.  P5 But participants who work effectively with their remote members become satisfied with the work process No surprise here! Even less surprise here!

27. MIS 648 Lecture 1126 The Research  Teams of four students from two universities developed database applications and manuals (N=82; number of groups was unreported)  Groups either worked only F2F or F2F+remotely.  Research was “interpretive” and “qualitative”.

28. MIS 648 Lecture 1127 “Results”  P1: supported by comments  P2: supported by comments  P3: supported by comments  P4: supported by comments  P5: supported by comments  Additional insights: An intense need for quick response, high-quality information, and valuable information.

29. MIS 648 Lecture 1128 Recommendations  Use F2F early and late in the project  Modularize, provide rapid feedback to prevent dropping communication  In addition, develop team leaders, structure teams well, populate intelligently with knowledge of social norms and standards.  Undepersonalize through small teams, some F2F contact, be aware of social context.