Define Global Business

							           Global Business Drivers


What is the chapter’s message?


There are several business drivers that impact a
company’s IS strategy.
           Global Business Drivers
GBD force a company towards globalization.
The ways globalization occurs:
extract information from tangible products
replace material by knowledge
add value by using information
use information to streamline transportation,
production, and inventory
           Global Business Drivers
Use IS to transfer money
Use IS to coordinate worldwide production
Use IS to connect a dispersed value chain
Legacy systems may reduce the effectiveness of
GBDs
           Global Business Drivers
Case Example
1) A multinational company needed tighter control
2) Local management resisted loss of freedom
3) Country-specific accounting practices ere
     hindrances
4) Lack of the software support in several countries
5) Software need language modifications
6) Operating environments were difficult
7) High telecommunications costs
           Global Business Drivers
The GBDs
1) GBDs are a communications tool to help
    CEOs develop a good IT strategy
2) GBDs focus on:   customers
                    suppliers
                    orders
                    projects
                    inventory
                    capture information
           Global Business Drivers
Cont’d.
3) GBDs help define a common coherent data
    model
4) GBDs help define an organizational structure
           Global Business Drivers
The GBD Model
1) Globalization
2) Global union and strategy
3) Global Drivers

     Network         Information Technology
     Organization    Data
                     Application
                     Infrastructure
             Global Business Drivers
What are the GBDs?
1) Joint resources
2) Rationalized & flexible operations
3) Risk reduction
4) Global products
5) Quality
6) Suppliers
7) Corporate customers
            Global Business Drivers
Joint Resources
1) Employee count
2) Employee skill
3) Employee compensation
Questions
1) Can IT move work to employers?
2) Can IT make employees cooperate across time &
     space?
3) Can IT manage employees across time & space?
             Global Business Drivers
Rationalized Operations
1) Plan
2) Schedule
3) Capacity
4) Inventory
Questions:
1) How can IT further rationalization of the
    factors above?
           Global Business Drivers

Cont’d
2) What is rationalization?
             Global Business Drivers
Risk Reduction
1) Investment risk
2) Foreign exchange risk
3) Asset risk
Questions:
1) How IT helps reduce risk?
2) IT helps process foreign exchange risk?
3) IT helps inventory management?
           Global Business Drivers
Cont’d
4) IT helps calculate investment risk?
5) IT helps gather political risk information?
           Global Business Drivers
Global Products
1) Product standards
2) Process standards
3) Legal standards
4) Repair records
             Global Business Drivers

Questions:
1) How does IT support global products?
2) Global brand management?
3) Synchronize global production?
             Global Business Drivers
Quality
1) Competitive benchmarking
2) Innovation
Questions:
1) IT traces product composition which enables
     finding faulty products.
2) IT helps construct quality benchmarks.
            Global Business Drivers
Suppliers
1) IT helps the ordering process
2) IT helps negotiate price discounts
3) IT helps quality
Corporate customers;
IT helps become a leading edge supplier
IT helps deliver investment quality product
           Global Business Drivers
GBD applications
1) Define global business drivers for each
    industry
2) Define the importance of GBDs for each
    industry
3) Construct the IT strategy to respond to GBDs.
           Global Business Drivers
Networked Organization
1) Historically we had hierarchical organizations
2) Information flows up to the center
3) Instructions flow down to the bottom
4) In a post modern company we have a
     DECENTERED organizational structure
5) Business clusters
6) Independence, dispersed, cooperation
          Global Business Drivers
Cont’d
7) Not all nodes are owned by the same company
-   virtual organizations
           Global Business Drivers
The new Dynamic Network
1) Decentralized activities - value chain
dispersed globally and controlled by IT
2) Brokers coordinate cooperation among
different organizations
3) Market Mechanisms
Control ???????????
4) Full disclosure Information Systems
Trust in built by openness
          Global Business Drivers

How to Ensure Success
1) GBDs are the basic for IT structure
2) Partnership
     Understand local customers
3) Use an international design team
4) Construct a good communications
     infrastructure