McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved

Business Driven Information Systems 2eBusiness Driven Information Systems 2eBusiness Driven Information Systems 2eBusiness Driven Information Systems 2e

CHAPTER 12

GLOBALIZATION, INNOVATION, AND

21ST ORGANIZATIONAL TRENDS

CHAPTER 12

GLOBALIZATION, INNOVATION, AND

21ST ORGANIZATIONAL TRENDS

12-2

GLOBALIZATION

• Traditional forms of business are simply not good enough in a global environment

• Businesses are operating on a global playing field

• The Internet is changing the way companies do business

12-3

12-4

GLOBALIZATION

• Challenges that must be confronted to succeed in a global business environment include: – Cultural Business Challenges– Political Business Challenges– Geoeconomic (geographic and economic)

Business Challenges

12-5

Cultural Business Challenges

• Cultural business challenges include differences in…– Languages– Cultural interests– Religions– Customs– Social attitudes– Political philosophies– Business practices– Work ethic– Currencies

12-6

Political Business Challenges

• Political business challenges include:

– Numerous rules and regulations surrounding data transfers across national boundaries (especially personal information)

– Tax implications

– Hardware and software importing and exporting

– Trade agreements

– Differences in laws such as privacy, security

12-7

Geoeconomic Business Challenges

• Geoeconomic - refers to the effects of geography on the economic realities of international business activities– Distances– Time zone differences– Skilled labor supply & cost of labor – Cost of living– Infrastructure issues

12-8

Global Business Challenges

• Key questions to ask when creating a global website:

– Will the site require new navigational logic to accommodate cultural preferences?

– Will content be translated?

• If so, into how many languages?

– Will multilingual efforts be included in the main site or will it be a separate site - with a country-specific domain?

12-9

Cultural Business Challenges

• More key questions:

– Which country will the server(s) be located in to support local user needs?

– What legal ramifications might occur by having the website targeted at a particular country, such as laws on competitive behaviors, treatment of children, or privacy?

12-10

Global Business Challenges

McDonald’s Web Sites …

• http://www.mcdonalds.com

• http://www.meencanta.com

• http://www.myinspirasian.com/

• http://www.mcdonalds.com.mx

12-11

Global IT Business Areas

Four Global IT Business Management Areas

12-12

GLOBAL IT BUSINESS STRATEGIES

• Global IT business strategies must include detailed information on the application of information technology across the organization

• IT systems depend on global business drivers such as…– The nature of the industry– Competitive factors– Environmental forces

12-13

GLOBAL IT BUSINESS STRATEGIES

Global IT Business Drivers

12-14

GLOBAL IT BUSINESS STRATEGIES

• Fast-growing key areas for all global business strategies include governance and compliance:

– Governance - is a method or system of government for management or control

– Compliance - is the act of conforming, acquiescing, or yielding

12-15

GLOBAL IT BUSINESS STRATEGIES

• Organizations today are subject to many regulations governing:

• Data retention• Confidential information• Financial accountability• Recovery from disasters

• By instituting IT governance, firms have the internal guidelines and controls they need to comply (compliance) with these regulations

12-16

GLOBAL ENTERPRISE ARCHITECTURES

• Enterprise architecture - includes the plans for how an organization will build, deploy, use, and share its data, processes, and IT assets

• An organization must manage its global enterprise architecture to support its global business operations

12-17

GLOBAL ENTERPRISE ARCHITECTURES

• Issues in global enterprise architecture design:– Improving efficiency of global networks– managing global network infrastructures– Dealing with differences in networks & integrating

global technologies– Controlling data communication security– Dealing with transborder data flow restrictions– Understanding & complying with international

telecommunications regulations– Complying with international tariff structures

12-18

GLOBAL INFORMATION ISSUES

• Key global information issues include:

1. Information Security

2. Information Privacy

12-19

GLOBAL INFORMATION ISSUES: Security

• Businesses must have the appropriate levels of authentication, access control, and encryption in place, to ensure…

1. That only authorized individuals can gain access to the network

2. That they have access to only those applications for which they are entitled

3. That information cannot be understood or altered while in transit

12-20

GLOBAL INFORMATION ISSUES: Security

• Deperimeterization - occurs when an organization moves employees outside its firewall, a growing movement to change the way corporations address technology security

• Companies should focus on beefing up security in end-user devices and an organization's critical information assets

12-21

GLOBAL INFORMATION ISSUES: Privacy

• Information privacy - concerns the legal right or general expectation of individuals, groups, or institutions to determine for themselves, when, and to what extent, information about them is communicated to others

• Information privacy is about how personal information is collected and shared

12-22

GLOBAL INFORMATION ISSUES: Privacy

• Transborder data flows (TDF) occur when business data flows across international boundaries over the telecommunications networks of global information systems

• Many countries view TDF as violating their national sovereignty

12-23

GLOBAL INFORMATION ISSUES: Europe

• European Union members have:

1. The right to know the source of personal data processing and the purposes of such processing

2. The right to access and or/correct inaccuracies in one’s own personal data

3. The right to disallow the use of personal data

12-24

GLOBAL INFORMATION ISSUES: Europe

• Any organization processing personal data of a person living in the EU must comply with key principles:

1. Fairly and lawfully processed

2. Processed for limited purposes

3. Adequate, relevant, and not excessive

4. Accurate

5. Not kept longer than necessary

6. Processed in accordance with the data subject’s rights

7. Not transferred to countries without adequate protection

12-25

GLOBAL INFORMATION ISSUES: United States

• Information privacy is not highly legislated or regulated

• There is no all-encompassing law that regulates the use of personal data or information

• Access to public information is considered culturally acceptable, such as obtaining credit reports for employment or housing purposes

12-26

GLOBAL INFORMATION ISSUES: Privacy

• US – EU data privacy requirements

12-27

GLOBAL SYSTEMS DEVELOPMENT

• Global information systems must support a diverse base of customers, users, products, languages, currencies, laws, cultures, technology platforms, etc.

• One of the most important challenges is the global standardization of data definitions

12-28

GLOBAL SYSTEMS DEVELOPMENT

• Organizations can use several strategies to solve problems in global information systems development:

1. Transform and customize an information system into a global application

2. Set up a multinational development team

3. Use centers of excellence

4. Outsource the development work

12-29

Integrating Global Systems

• The IT industry is one of the most dynamic in the global economy

• The integration of business and technology has allowed organizations to…– Increase their share of the global economy– Transform the way they conduct business– Become more efficient and effective

12-30

21ST CENTURY ORGANIZATION TRENDS

• In the next decade, the relentless march of computer power and Internet connection speeds will bring more profound changes to work than anything seen so far

• Organizations that want to survive must learn to identify and embrace these technological changes and learn to operate in entirely different ways

12-31

21ST CENTURY ORGANIZATION TRENDS

• The primary changes and challenges organizations are focusing on in the 21st century include:– Innovation– Social entrepreneurship: going green– Organizational Social Networking– It’s a whole new virtual world

12-32

INNOVATION

• Innovation is the introduction of new equipment or methods

– Driven by the need to cut costs while creating a competitive advantage

– Find ways to test and push current performance– Attract motivated groups of employees– Reward risk takers– Celebrate diversity/different cultures/different

disciplines– Encourage practitioner/developer collaboration

12-33

SOCIAL ENTREPRENEURSHIP: GOING GREEN

• Social responsibility - implies that an entity has a responsibility to society

– Corporate policy – is a dimension of social responsibility that refers to the position a firm takes on social and political issues

– Corporate responsibility – is a dimension of social responsibility that includes everything from hiring minority workers to making safe products

12-34

SOCIAL ENTREPRENEURSHIP: GOING GREEN

• Sustainable, or "green," IT - describes the manufacture, management, use, and disposal of information technology in a way that minimizes damage to the environment

• Several issues:– Energy consumption– Recycling IT equipment– Greener IT

12-35

SOCIAL ENTREPRENEURSHIP: GOING GREEN

• Energy Consumption– Green energy practices– Energy rebate programs– Smart cooling– Alternative energy sources

• Recycling IT equipment– Sustainable IT disposal – refers to the safe

disposal of IT assets – E-waste – old computer equipment

• Greener IT – additional ways to save energy in the data center & other facilities

12-36

Organizational Social Networking

12-37

Passive Search

• Finding so-called passive candidates - people who are happy and productive working for other companies

• Hiring people as a result of connections through LinkedIn and others

• LinkedIn has 6.7 million members, is a virtual Rolodex

12-38

Boomerangs

• Use social networking to lure back selected former employees, or so-called boomerangs

• Boomerangs cost less to train than new hires and they tend to hit the ground running

• As the labor market tightens, “alumni” become an increasingly attractive source of talent

12-39

Marketing Networks

• Business-oriented networks are increasingly useful in sales and marketing to help executives find employees as well as other resources

• Social networks help forge community with, and among, would-be customers

12-40

IT’S A WHOLE NEW VIRTUAL WORLD

• Two primary types of “virtual” that must be considered when looking at the 21st century world:1. Virtual worlds

2. Virtual workforces

12-41

Virtual Worlds

• As the virtual world grows, it will become more attractive to companies that want to send a multimedia message

• Example: Second Life, the online realm where real people, under the guise of avatars, mill and mingle - in some cases, make a living

• Adidas, Sun Microsystems, Toyota and others want to promote their products and ensure their brands are getting exposure amid young, techno-savvy consumers

12-42

Virtual Workforce

• Letting employees work from outside the office…telecommuting– Keeps cars off the road– Helps a company to bolster its “green” image– Fosters employee retention– Boosts worker productivity– Slashes real estate costs

12-43

Tools for the Virtual Workforce

• Mobile commerce (m-commerce) - the ability to purchase goods and services through a wireless Internet-enabled device

• Telematics - blending computers and wireless telecommunications technologies

• Electronic tagging - a technique for identifying and tracking assets and individuals via technologies such as radio frequency identification and smart cards