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Chapter 12 Transnational IT Issues N GLOBAL STRATEGIES & BUSINESS ORGANIZATION DOMESTIC EXPORTER: Centralization in Home Country MULTINATIONAL: Central Home Base; Decentralized Production, Sales, Marketing in Other Countries

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Chapter 12 l.jpg

Chapter 12

Transnational IT Issues

N


Global strategies business organization l.jpg
GLOBAL STRATEGIES & BUSINESS ORGANIZATION

  • DOMESTIC EXPORTER:Centralization in Home Country

  • MULTINATIONAL:Central Home Base; Decentralized Production, Sales, Marketing in Other Countries

  • FRANCHISER:Product Created, Initially Produced in Home Country; Relies Heavily on Local Workers to Produce, Market in Other Countries

    *

Dr. Chen,Transnational IT Issues and IT Buiness

TM -2


Global strategies business organization3 l.jpg
GLOBAL STRATEGIES & BUSINESS ORGANIZATION

  • TRANSNATIONAL:Truly Global Firm; No National Headquarters; Value-added Activities Managed From Global Perspective; Optimizes Supply & Demand, Taking Advantage of Local Competitive Strengths

    *

Dr. Chen,Transnational IT Issues and IT Business

TM -3


Global international transnational information systems infrastructure l.jpg
GLOBAL (INTERNATIONAL, TRANSNATIONAL) INFORMATION SYSTEMS INFRASTRUCTURE

BASIC INFORMATION SYSTEMS

REQUIRED TO COORDINATE

WORLDWIDE TRADE

& OTHER ACTIVITIES

Dr. Chen,Transnational IT Issues and IT Business

TM -4


Global information systems infrastructure l.jpg
GLOBAL INFORMATION SYSTEMS INFRASTRUCTURE INFRASTRUCTURE

GLOBAL ENVIRONMENT: BUSINESS DRIVERS & CHALLENGES

CORPORATE GLOBAL STRATEGIES

ORGANIZATIONAL STRUCTURE

MANAGEMENT & BUSINESS PROCEDURES

TECHNOLOGICAL PLATFORM

GLOBAL INFORMATION SYSTEMS INFRASTRUCTURE

Dr. Chen,Transnational IT Issues and IT Business

TM -5


The impact of information technology on transnational firms l.jpg
The Impact of Information Technology on Transnational Firms INFRASTRUCTURE

  • Geographic transfer of work

  • Global networking and expertise sharing

  • Global service levels

  • Time-based competition

  • Cost reduction

Dr. Chen,Transnational IT Issues and IT Business

TM -6

N


Country diversity l.jpg
Country Diversity INFRASTRUCTURE

  • Sociopolitical

  • Language

  • Local constraints

  • Economics

  • Currency issues

  • Autonomy

  • National Infrastructure

Dr. Chen,Transnational IT Issues and IT Business

TM -7

N


Issues in the national it environment l.jpg
Issues in the National IT Environment INFRASTRUCTURE

  • Availability of IT professional staff

  • Central telecommunications

  • National IT strategy

  • General level of IT sophistication

  • Size of local market

  • Data export control

  • Technological awareness

  • Border opportunities

Dr. Chen,Transnational IT Issues and IT Business

TM -8

N


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Corporate Factors INFRASTRUCTURE

  • Nature of firm’s business

    • degree of integration and on-line update

  • Strategic impact of IT

  • Corporate organization

  • Company technical and control characteristics

    • level of functional control

    • technology base

    • corporate size

Dr. Chen,Transnational IT Issues and IT Business

TM -9

N


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Transnational IT Policy Issues INFRASTRUCTURE

  • Guidance on architecture

    • a corporate international data dictionary

    • common communication technology

  • Central hardware/software concurrence or approval

  • Central approval of software standards and feasibility studies

  • Central software development

Dr. Chen,Transnational IT Issues and IT Business

TM -10

N


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Transnational IT Policy Issues (Cont.) INFRASTRUCTURE

  • IT communications

    • regular interunit meetings

    • corporate–subsidiary exchange visits

    • newsletters

    • education

  • Staff rotation

  • Consulting services

  • Central IT processing support

Dr. Chen,Transnational IT Issues and IT Business

TM -11

N


Information technology and globalization l.jpg

Drivers of INFRASTRUCTURE

Change

Competitive

Environment

Business/IT

Strategy

Business

Implementation

Information Technology and Globalization

Globalization

Emerging

Global

Markets

Internetworking

The Global

Enterprise

Global Business

Operations &

Alliances

Information

Technology

N

Dr. Chen,Transnational IT Issues and IT Business

TM -12


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Alignment of Global Vision with IT using Global Drivers INFRASTRUCTURE

N

Dr. Chen,Transnational IT Issues and IT Business

TM -13


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Global IT INFRASTRUCTURE

Management

Cultural, Political,

and Geoeconomic

Challenges

Business/IT

Strategies

Application

Portfolios

Technology

Platforms

Data

Management

Systems

Development

The Major Dimensions of Global IT Management

N

Dr. Chen,Transnational IT Issues and IT Business

TM -14


Global business drivers general cultural factors l.jpg
GLOBAL BUSINESS DRIVERS INFRASTRUCTUREGeneral Cultural Factors:

  • GLOBAL COMMUNICATION & TRANSPORTATION TECHNOLOGIES

  • DEVELOPMENT OF GLOBAL CULTURE

  • EMERGENCE OF GLOBAL NORMS

  • POLITICAL STABILITY

  • GLOBAL KNOWLEDGE BASE

Dr. Chen,Transnational IT Issues and IT Business

TM -15


Global business drivers specific business factors l.jpg
GLOBAL BUSINESS DRIVERS INFRASTRUCTURESpecific Business Factors:

  • GLOBAL MARKETS

  • GLOBAL PRODUCTION & OPERATIONS

  • GLOBAL COORDINATION

  • GLOBAL WORK FORCE

  • GLOBAL ECONOMIES OF SCALE

Dr. Chen,Transnational IT Issues and IT Business

TM -16


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CHALLENGES & OBSTACLES TO GLOBAL BUSINESS SYSTEMS INFRASTRUCTURE

GENERAL:

  • CULTURAL PARTICULARISM

  • SOCIAL EXPECTATIONS

  • POLITICAL LAWS

    SPECIFIC:

  • TELECOMMUNICATION STANDARDS

  • NETWORK RELIABILITY

  • DATA TRANSFER SPEEDS

  • SHORTAGE OF CONSULTANTS

    *

Dr. Chen,Transnational IT Issues and IT Business

TM -17


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IT Characteristics of Transnational INFRASTRUCTURECompanies

  • Logically Consolidated, Physically Distributed

  • Common Data

  • Integrated Systems

  • Specialized Workstation-Based Applications

  • Transnational IT Policies and Standards

Dr. Chen,Transnational IT Issues and IT Business

TM -18


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DOMESTIC INFRASTRUCTURE

EXPORTER

GLOBAL BUSINESS STRATEGY & STRUCTURE

STRATEGY

MULTI-

NATIONAL

TRANS-

NATIONAL

FRANCHISER

FUNCTION

PRODUCTION

CENTRALIZED

DISPERSED

COORDINATED

COORDINATED

FINANCE/ACCOUNTING

CENTRALIZED

CENTRALIZED

CENTRALIZED

COORDINATED

SALES/MARKETING

MIXED

DISPERSED

COORDINATED

COORDINATED

HUMAN RESOURCES

CENTRALIZED

CENTRALIZED

COORDINATED

COORDINATED

STRATEGIC MANAGEMENT

CENTRALIZED

CENTRALIZED

CENTRALIZED

COORDINATED

Dr. Chen,Transnational IT Issues and IT Business

TM -19


Global information systems l.jpg
GLOBAL INFORMATION SYSTEMS INFRASTRUCTURE

  • CENTRALIZED:Domestic Home Base

  • DUPLICATED:Copies of Home System Used in Foreign Locations

  • DECENTRALIZED:Each Unit has Unique System

  • NETWORKED:Integrated & Coordinated at all Locations

Dr. Chen,Transnational IT Issues and IT Business

TM -20


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Global Considerations for IT INFRASTRUCTURE

Import

Restrictions

Tariffs

Global

IT

Issues

Compatibility

and

Documentation

Transborder

Data Flows

Government

Approval

Level of

Local Service

Dr. Chen,Transnational IT Issues and IT Business

TM -21


Global information systems configurations l.jpg
GLOBAL INFORMATION SYSTEMS CONFIGURATIONS INFRASTRUCTURE

STRATEGY

SYSTEM

DOMESTIC

MULTI-

TRANS-

CONFIGURATION

EXPORTER

NATIONAL

FRANCHISER

NATIONAL

CENTRALIZED

X

DUPLICATED

X

DECENTRALIZED

x

X

x

NETWORKED

x

X

X : DOMINANT PATTERNx : EMERGING PATTERN

Dr. Chen,Transnational IT Issues and IT Business

TM -22


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REORGANIZE THE BUSINESS INFRASTRUCTURE

  • ORGANIZE VALUE-ADDING ACTIVITIES FOR COMPARATIVE ADVANTAGE

  • DEVELOP & OPERATE SYSTEMS AT EACH LEVEL: National; Regional, International

  • ESTABLISH SINGLE WORLD HEADQUARTERS: Have Global Chief Information Officer

Dr. Chen,Transnational IT Issues and IT Business

TM -23


Strategy divide conquer appease l.jpg
STRATEGY: DIVIDE, CONQUER, APPEASE INFRASTRUCTURE

  • DEFINE CORE BUSINESS PROCESSES

  • IDENTIFY CORE SYSTEMS TO COORDINATE CENTRALLY

  • CHOOSE AN APPROACH: Incremental, Grand Design, Evolutionary

  • MAKE BENEFITS CLEAR

Dr. Chen,Transnational IT Issues and IT Business

TM -24


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MAIN TECHNICAL ISSUES INFRASTRUCTURE

  • HARDWARE & SOFTWARE INTEGRATION

  • CONNECTIVITY

  • SOFTWARE: Languagescan be a Barrier

Dr. Chen,Transnational IT Issues and IT Business

TM -25


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Technology Appraisal Program INFRASTRUCTURE

  • Technology appraisal program: as an audit function

    • first visit: appraise existing services and raise general concerns that local management could effectively pursue

    • second visit: assess problems of:

      1. Government restrictions

      2. Quality and quantity of available human skills

      3. Present and planned communication services

    • at least three alternatives should be prepared

      • Expansion of present system

      • Transfer of all or portion of IT work to a neighboring country

      • Transfer of all or portion of IT work to a regional headquarters.

Dr. Chen,Transnational IT Issues and IT Business

TM -26


Summary l.jpg
Summary INFRASTRUCTURE

  • Coordinating international IT is extraordinary complex. Corporate IT management may have maximum responsibility for, but only limited authority over, distant staff and technologies.

  • Demand leadership on:

    • persuasion and cajoling

    • being will informed on new technologies

    • the corporate culture, and

    • the wide diversity of cultures existing in the world

Dr. Chen,Transnational IT Issues and IT Business

TM -27

N


Chapter 13 l.jpg

Chapter 13 INFRASTRUCTURE

The IT Business

Is IT business in the electronic-based computer, telecommunications, and desk support business?


Manageable trends six major themes l.jpg
Manageable Trends INFRASTRUCTURE(Six Major Themes)

  • Strategic Impact of IT

  • Integrating Changing Technology Platforms

  • Assimilating Emerging Technologies

  • Sourcing Policies for the IT Value Chain

  • Applications Development Process

  • Partnership of Three Constituencies

TM -29

TM -29

Dr. Chen, The Trends of the Information Systems Technology

N


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The IT Business Analogy INFRASTRUCTURE

“Information Technology ... is in the business of bringing a sustained stream of innovation in information technology to companies’ operations and, in many cases, products.”

  • IT strategy formulation = Marketing mix

  • IT steering committee = Board of directors

  • IT director = Chief executive officer

TM -30

Dr. Chen,Transnational IT Issues and IT Business

N


Changes in it product line l.jpg
Changes in IT Product Line INFRASTRUCTURE

Dr. Chen,Transnational IT Issues and IT Business

TM -31

N


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Changes in IT Consumer Profile INFRASTRUCTURE

Dr. Chen,Transnational IT Issues and IT Business

TM -32

N


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Changes in Consumer Costs INFRASTRUCTURE

Dr. Chen,Transnational IT Issues and IT Business

TM -33

N


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Changes in the IT Channels of Distribution INFRASTRUCTURE

Dr. Chen,Transnational IT Issues and IT Business

TM -34

N


Competitive challenges l.jpg
Competitive Challenges INFRASTRUCTURE

1. Consumers ignoring IT’s manufacturing and distributing capacity

2. Consumers failing to recognize that they have problems or opportunities that can be addressed by IT

To deal with 1., be prepared to limit manufacturing role and place resources with the consumer

To deal with 2., educate consumers as to benefits/costs of IT solutions, especially new technologies

N

Dr. Chen,Transnational IT Issues and IT Business

TM -35


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Promotion INFRASTRUCTURE

  • “Phase-2 learning by consumers is at the core of a successful IT business.”

  • Key promotional activities:

    • price discounts — introductory offers

    • branch offices — decentralized analysts

    • central IT sales force and coordination

  • Be prepared to deal with direct marketing to consumers

  • Consider change to market structure from product structure

N

Dr. Chen,Transnational IT Issues and IT Business

TM -36


Price i l.jpg
Price I INFRASTRUCTURE

  • Market inefficiencies affect evaluation of external vendor’s prices

    • difficulty of assessing quality of product

    • differences in vendor’s strategic position

    • by-product vs. main product pricing

    • excess capacity and loss-leader pricing

  • Introductory offers

N

Dr. Chen,Transnational IT Issues and IT Buiness

TM -37


Price ii l.jpg
Price II INFRASTRUCTURE

  • Monopoly position of the central IT unit

    • most evident in confidential data management, centralized databases

  • Unbundling

    • separate pricing for development, maintenance, operations, and special turnaround

    • state prices in consumer units

  • Profit

N

Dr. Chen,Transnational IT Issues and IT Business

TM -38


Slide39 l.jpg

Board of Directors INFRASTRUCTURE

A Business

Products/Services

Customers

Suppliers

Competitors

CAIT: Figure 9-6

Dr. Chen,Transnational IT Issues and IT Business

TM -39


Slide40 l.jpg

Board of Directors INFRASTRUCTURE

Information

Systems

Organization

Customers

Suppliers

Competitors

CAIT: Figure 9-7

Dr. Chen,Transnational IT Issues and IT Business

TM -40


Slide41 l.jpg

Needs and Priorities INFRASTRUCTURE

Steering Committee

Opportunities

Direction

Wants & Needs

Justification

Real Dollars?

IT Needs,

Real Dollars

Information

Systems

Organization

Users

Suppliers

Products,

People

Products & Services

Constraints Costs

Pressures on

IT Products

and/ Services

Real Dollars

Competitors

CAIT: Figure 9-8

Dr. Chen,Transnational IT Issues and IT Business

TM -41


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Role of the Board of Directors INFRASTRUCTURE(The IT Steering Committee)

  • Appoint and assess the performance of IT CEO

  • Assure that appropriate standards are in place and being adhered to

  • Ensure that (IT) board is structured appropriately

    • level of members appropriate to strategic importance of IT

    • representative of diverse user needs

    • appropriate technical persons

  • Provide broad guidance for IT to ensure it supports corporate strategy

    • presentations by IT about its markets, products, and plans

    • summary documentation of overall IT direction

    • briefings by (non-IT) board members on IT support

    • internal and external review of IT

Dr. Chen,Transnational IT Issues and IT Business

TM -42

N


Role of the it chief executive officer l.jpg
Role of the IT Chief Executive Officer INFRASTRUCTURE

  • Maintain personal relationships with board members and customers

  • Ensure that new technologies are evaluated early

  • Pay close attention to human resource management issues for IT staff

  • High priority to manufacturing security

  • Balance among marketing, manufacturing, and control

  • Develop IT esprit de corps

Dr. Chen,Transnational IT Issues and IT Business

TM -43

N


Making it happen l.jpg
Making It Happen! INFRASTRUCTURE

Business Leadership Technology Leadership

Competitive

Vision Tactics

Strategy

Crisis

Management

Process

Improvement

Action Initiators

Executive

Power

CAIT: Figure 9-5

Dr. Chen,Transnational IT Issues and IT Business

TM -44


Change issues between it organization and its customers l.jpg

IT INFRASTRUCTURE

Change

Change

Change Issues between IT Organization and its Customers

IT

Organization

Customers

IT is not in the electronic-based computer, telecommunications, and desk support business.

Rather, it is in the business of bringing a sustained relevant stream of innovation in IT to companies’ operations and, in many cases, products and services.

Dr. Chen,Transnational IT Issues and IT Business

TM -45

N


Ten commandments for digital products companies l.jpg
Ten Commandments for Digital Products Companies INFRASTRUCTURE

  • 1. Create early visibility and market presence

  • 2. Invest in building trust

  • 3. Don’t make it difficult for buyers to assess you and your products

  • 4. Provide signals about product quality

  • 5. Make it easy for buyers to express their needs.

Dr. Chen,Transnational IT Issues and IT Business

TM -46

N


Ten commandments for digital products companies47 l.jpg
Ten Commandments for Digital Products Companies INFRASTRUCTURE

  • 6. Don’t forget product quality

  • 7. Customize content and presentation

  • 8. Be nimble, be quick with customer care

  • 9. Don’t treat customers with a one-size-fits-all strategy

  • 10. Offer bundled products in a world of synergy

    - TEXAS, The Business School Magazine, Spring 1999 (pp. 10)

Dr. Chen,Transnational IT Issues and IT Business

TM -47

N


How to be successful l.jpg
How To Be Successful? INFRASTRUCTURE

  • “… Other entrepreneurs have told us that LUCK, LUCK, LUCK, and HARD (SMART) work are the four things it takes to be successful.”

  • You definitely need a lot of luck, but you also need to be smart enough to take advantage of the apparently lucky situations that arise.”

    • TEXAS, The Business School Magazine, Spring 1999 (pp.18)

Dr. Chen,Transnational IT Issues and IT Business

TM -48


Slide49 l.jpg

Figure 03.08 INFRASTRUCTURE

Dr. Chen,Transnational IT Issues and IT Business

TM -49


Slide50 l.jpg

Alignment of Global Vision with IT using Global Drivers INFRASTRUCTURE

N

Dr. Chen,Transnational IT Issues and IT Business

TM -50


Slide51 l.jpg

Figure U03.13 INFRASTRUCTURE

Dr. Chen,Transnational IT Issues and IT Business

TM -51


Information systems organization l.jpg
Information Systems Organization INFRASTRUCTURE

IS Vice-President

Planning

Finance &

Administration

Database

Administration

Development &

Maintenance

Systems

Support

Computer

Operations

Network

Management

Project

Management

Systems

Programming

System

Analysis

Programmers

Development

Center

Information

Center

Figure 13-1

Dr. Chen,Transnational IT Issues and IT Business

TM -52


Future is organization l.jpg

Client Interface INFRASTRUCTURE

General and

Administration

IS Utility

Telecommunications

Competitive

Systems

Administration

Data

Center

Data

Network

Performance

and Planning

Finance

Professional

and Technical

Support

Voice

Systems

Client Systems

Groups

Development

Center

Equipment

Future IS Organization?

IS Executive

CIO

Figure 13-2

Dr. Chen,Transnational IT Issues and IT Business

TM -53


Slide54 l.jpg

Managing Information Technology INFRASTRUCTURE

Business Pressures

Technology Base

Business

Pressures

Managing

Information

Technology

IT

Developments

Supplier

Customer

Dr. Chen,Transnational IT Issues and IT Business

TM -54


Internetworked enterprise l.jpg
Internetworked Enterprise INFRASTRUCTURE

Company

Boundary

Suppliers and Other Business Partners

Extranets

Procurement, Distribution, and Logistics

Engineering &

Research

Accounting,

Finance, and

Management

Manufacturing

and

Production

Advertising Sales Customer Service

Extranets

Customer and Business Customers

Dr. Chen,Transnational IT Issues and IT Business

TM -55

N


Transnational l.jpg
TRANSNATIONAL INFRASTRUCTURE

  • Truly globally managed firms that have no national headquarters; value-added activities are managed from a global perspective without a global borders, optimizing sources of supply and demand and taking advantage of any local competitive advantage.


Multinational and franchiser l.jpg
Multinational and Franchiser INFRASTRUCTURE

  • Multinational: a global strategy that concentrates financial management and control out of a central home base while decentralizing production, sales, and marketing operations to units in other countries.

  • Franchiser: a firm where product is created, designed, financed, and initially produced in the home country, but for product-specific reasons must rely heavily on foreign personnel for further production, marketing, and human resources.


Topics for the how paper l.jpg
Topics for the “HOW” Paper INFRASTRUCTURE

  • Marketing the solution

  • Architecture

  • Risk assessment

  • Implementation plan (coding, testing, cutover, training, conversion)

  • Results control architecture


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