02.Information Systems for Organizations and Globalization
2. Information Systems for Organizations and Globalization
IT1106 - Information Systems
Level I - Semester 1
2. Information Systems for Organizations and Globalization
2.1. Organizations and Information Systems
2.1.1. The Role of Information Systems in Business
2.1.2. Strategic Use of IT
2.1.3. Business Information Value Chain
2.1.4. Information Technology for Strategic Advantage
2.1.5. Careers in Information Systems
2.2. Information Technology Investments in Organizations
2.2.1. Return on Investment
2.2.2. Complementary Assets
2.2.3. Challenges and Ethics of IT Investments
2.3. Global Information Systems Strategies
2.3.1. Globalization and Global IT Management
2.3.2. Digital divide
2.3.3. Cultural, Ethnic, and Political Challenges
2.3.4. Global Business/IT Strategies, Applications and Platforms
The Role of Information Systems in Business
• Support of Business Processes and Operations.
Keep track of inventory, pay employees, buy new merchandise, and evaluate sales trends.
• Support of Business Decision Making
Decisions about what lines of merchandise need to be added or discontinued and what kind of investments they require are typically made after an analysis.
• Support of Strategies for Competitive Advantage. Store management might make a decision to install touch-screen kiosks in all stores, with links to the e-commerce Web site for online shopping.
2.1.2. Strategic Use of IT
Porter's Five Forces are considered the basic foundation for understanding business strategy.
Other Strategic Initiatives
2.1.2. Strategic Use of IT
Porter's Five Forces are considered the basic foundation for understanding business strategy.
Other Strategic Initiatives
Strategy - Growth
Company -
Citicorp Walmart Toys 'R' Us Inc.
Strategic Use of Information Technology -
Global intranet Merchandise ordering by global satellite network POS inventory tracking
Business benefit -
Increase in global market Market leadership Market leadership
Strategy - Alliance
Company -
Walmart/Procter & Gamble Cisco Systems Staples Inc. and Partners
Strategic Use of Information Technology -
Automatic inventory replenishment by supplier Virtual manufacturing alliances Online one-stop shopping with partners
Business benefit -
Reduced inventory cost/increased sales Agile market leadership Increase in market share
Other Strategic Uses of Information Technology
• Develop interenterprise information systems whose convenience and efficiency create switching costs that lock in customers or suppliers.
• Make major investments in advanced IT applications that build barriers to entry against industry competitors or outsiders.
• Include IT components in products and services to make substitution of competing products or services more difficult.
• Leverage investment in IS people, hardware, software, databases, and networks from operational uses into strategic applications.
How a customer-focused business builds customer value and loyalty using Internet technologies.
2.1.3. Business Information Value Chain
- Administrative Coordination and Support Services
- Collaborative Workflow Intranet
- Human Resources Management
- Employee Benefits Intranet
- Technology Development
- Product Development Extranet with Partners
- Procurement of Resources
- e-Commerce Web Portals for Suppliers
Primary Business Processes
Inbound Logistics
- Automated
- Just-in-Time
- Warehousing
- Customer-aided Flexible Marketing
- Online Point-of-Sale and other processing
- Targeted Marketing
Customer Service
- Customer Relationship Management
2.1.4. Information Technology for Strategic Advantage
• Business process reengineering (BPR) • Reengineering is a fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in cost, quality, speed, and service. • Used cross-functional enterprise resource planning (ERP) software to reengineer, automate, and integrate their manufacturing, distribution, finance, and human resource business processes.
Business Process Reengineering
Level of Change
Incremental
Radical
Process Change
Improved new version of process
Brand-new process
Starting Point
Existing processes
Clean slate
Frequency of Change
One-time or continuous
Periodic one-time change Time Required
Short
Long
Typical scope
Narrow,
within functions Broad,
cross-functional
Horizon
Past and present
Future
Participation
Bottom-up
Top-down
Path to Execution
Cultural
structural
Primary Enabler
Statistical control
Information technology
Risk
Moderate
High
2.1.5. Careers in Information Systems
Typical IS Titles and Functions
- • Chief Information Officer
- • Senior IS Managers
- • Operations Roles
•System operator
- • Development Roles
- • Support
2.2.2. Complementary Assets • Assets required to derive value from a primary investment. • Firms must rely on supportive values, structures and behavior patterns to obtain a greater value from their IT investments. • Complementary assets include: • Organizational investments, eg Appropriate business model, Efficient business processes • Managerial investments, eg Incentives for management innovation, teamwork and collaborative work environments • Social investments, eg The Internet and telecommunications infrastructure, Technology standards
Source: https://studymoose.com/information-systems-3-essay
2.2.3. Challenges and Ethics of IT Investments
ETHICAL STANDARDS Demonstrates the firm's values are aligned with mine (65%)
Is forthright about conflicts of interest (72%)
Has adopted a recognized code of conduct (69%)
Has no regulatory/compliance violations (71%)
Global Team Management • Obtain local human-resources expertise • Create job grade consistency across regions • Manage dispersed staff as portfolio teams • Make the work meaningful • Clearly defining the roles of remote groups can also help knit them together • Bring remote staff to headquarters • Foster communication across regional boundaries
2.3.2. Digital Divide A digital divide is any uneven distribution in the access to, use of, or impact of information and Communication Technologies (ICT) between any number of distinct groups. These groups may be defined based on social, geographical or geopolitical criteria, or otherwise. Because of ICT high cost, its Adoption and utilization is high uneven across the globe.
Source: https://en.wikipedia.org/wiki/Digital_divide
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2.3.3. Cultural, Ethnic, and Political Challenges Political Challenges • Many countries have rules regulating or prohibiting the transfer of data across their country boundaries. • Some countries have reciprocal trade agreements
Geoeconomics Challenges • Physical distances. • Difficult to communicate in real time across the world's 24 time zones. • Difficult to get good-quality telephone and telecommunications service in many countries. • Difficult to find enticing specialists from other countries to live and work there. • Great differences in the cost of living and labor costs in various countries.
Cultural challenges • Differences in languages, cultural interests, religions, customs, social attitudes, and politics philosophies. • Differences in work styles and business relationships.
2.3.4. Global Business/IT Strategies
Comparing Global Business / IT strategies
International
* Autonomous operations
* Region specific
* Vertical integration
* Specific customers
* Captive manufacturing
* Customer segmentation and dedication by region and plant
Global Global sourcing
Multiregional Horizontal integration
Some transparency of customers and production
Some cross-regionalization
International
* Autonomous operations
* Region specific
* Vertical integration
* Specific customers
* Captive manufacturing
* Customer segmentation and dedication by region and plant
Global Global sourcing
Multiregional Horizontal integration
Some transparency of customers and production
Some cross-regionalization
Transnational
- Virtual business operations via global
- alliances World markets and mass customization
- Global e-commerce and customer service Transparent manufacturing
- Global supply chain and logistics Dynamic resource management
Information Technology Characteristics
- Stand-alone systems
- Decentralized/no standards Heavy reliance on interfaces
- Multiple systems, high redundancy, and duplication of services and operations
- Lack of common systems and data Regional decentralization
- Interface dependent Some consolidation of applications and use of common systems
- Reduced duplication of operations Some worldwide IT standards
- Logically consolidated, physically distributed, Internet connected Common global data resources
- Integrated global enterprise systems Internet, intranet, extranet, and Web-based applications
- Transnational IT policies and standards
Global alliances
Examples
- British Airways
- American Delta/
- Air France
IT environment
- Global network (online reservation system)
- * Coordination of schedules
- *Code sharing
- * Coordination of flights
- * Co-ownership
Global sourcing and logistics
Examples
- Benetton
- Global network, EPOS terminals in 4,000 stores, CAD/CAM in central manufacturing, robots and laser scanner in automated warehouse.
- * Produce 2,000 sweaters per hour using CAD/CAM
- * Quick response (in stores in 10 days)
- * Reduced inventories (just-in-time)
Global Customer Service
Examples
- American Express
- Global network linked from local branches and local merchants to the customer database and medical or legal referrals database.
- * Worldwide access to funds
- * “Global Assist” hotline
- * Emergency credit card replacement
- * 24-hour customer service
2.3.4. Global Business/IT Applications
Business Drivers of Global IT
• Global Customers. Customers are people who can travel anywhere or companies with global operations. Global IT can help provide fast, convenient service. • Global Products. Products are the same throughout the world or are assembled by subsidiaries throughout the world. Global IT can help manage worldwide marketing and quality control. • Global Operations. Parts of a production or assembly process are assigned to subsidiaries based on changing economic or other conditions. Only global IT can support such geographic flexibility. • Global Resources. The use and cost of common equipment, facilities, and people are shared by subsidiaries of a global company. Global IT can keep track of such shared resources. • Global Collaboration. The knowledge and expertise of colleagues in a global company can be quickly accessed, shared, and organized to support individual or group efforts. Only global IT can support such enterprise collaboration
2.3.4. Global Business/IT Platforms • Global Business/IT Platforms means managing the hardware, software, data resources, telecommunications networks, and computing facilities that support global business operations. • The management of a global IT platform is not only technically complex but also major political and cultural implications. Such as, • Hardware choices are difficult in some countries • Software packages developed in Europe may be incompatible with American or Asian versions • Difficult to manage international data communications networks. • Establishing computing facilities internationally is another global challenge.
International Data Communications Issues Network Management Issues • Improving the operational efficiency of networks • Dealing with different networks • Controlling data communication security • Burgeoning growth of data
Regulatory Issues • Dealing with transborder data flow restrictions • Managing international telecommunication regulations • Handling international politics • User auditability
Technology Issues • Managing network infrastructure across countries • Managing international integration of technologies • Limits on scalability of data management platforms • The need for 24/7 data and application recovery services
Country-Oriented Issues • Reconciling national differences • Dealing with international tariff structures • Lack of qualified people • Data security and transborder data regulations