Managing global systems

1. Managing global systems Think global Act local

2. DHL builds a global IT organization • Overnight and express package deliveries • Serving 140,000 destinations in over 220 countries • 4,400 local offices • 238 gateways • 450 hubs, warehouses • 4.2 millions customers • Employ 170,000 people • More than 400 aircrafts

3. Challenges • Keep track of its own operations • Customer packages

4. Act local • Customer & employee would see information in • Local language • Important country regulations • Think global • DHL can check on status and location of any package around the world • Info is current & accurate

5. Original IT design • 50 data centers in each major countries • Coordinate loosely • Common set of core database application • Info exchanged on a messaging and communication network • Operate well until traffic volume expanded

6. Maintain 50 data centers to a single standard was difficult • Raise cost • Slow down changes • Upgrades has to deploy in 50 different countries • Take more than 18 months to complete • “info is more important than the package” • Customer might understand package lost due to hurricane • Customer is intolerable to failure of tracking

7. New configuration • Global computing infrastructure • 3 low-cost, regional global centers • Outsourcing software • Initially • India software company • Changed • Design: USA • Implementation & execution: India

8. Benefits • Cost • Maintain IT infrastructure fallen by 40% • Deploy new software • In hours (not months) • Simplify management communication

9. 15.1 The growth of international info systems 15.2 Organizing international info systems 15.3 Managing global systems 15.4 Technology issues & opportunities for global value chains

10. 15.1 Growth of international IS • Advanced networks & info systems • Global economic system • International trade • 22% of US economy • 1/3 of the world’s total GDP

12. Developing an international info systems architecture • Basic info system • To coordinate worldwide trade & other activities

13. International IS architecture

14. Understand global environment • Business drivers • Force in the environment which business must respond • Global competition • Global funds • Challenges • Inhibitors or negative factors • 民族主義 (伊朗、玻利維亞…) • 箝制言論自由

15. Corporate strategy to compete • Ignore global market • Focus on domestic markets • Sell to globe from a domestic base • Organizing production & distribution around the globe • Structure of organization • Division of labor across a global environment • Where to locate • Production, administration, …..

16. Management issues • Business processes • How can you reengineer on a global scale • Technology platform • Choose the right technology to support business processes

17. The global environment: Business drivers & challenges • Business drivers • General culture factors • Global village • Telecommunication & transportation technology Communicate around the globe Communication to next block moving goods & service

18. Global culture • Common expectations right & wrong desirable & undesirable heroic & cowardly • Created by TV, Internet, Movie … • Global knowledge base used to be • Developed countries US, western Europe, Japan • Third world • Now, 金磚四國，四小龍

19. Specific business factor • Global market • Coca-cola, American sneakers, CNN • Global production & operation • Location of business activities according comparative advantage • Global coordination • Global workforce • Global economies of scale • Manufacturing has been much more affected than services

20. Business challenges of globalization • Particularism • Making judgment and taking action on the basis of narrow or personal characteristics • Religious • Nationalistic • Ethnic • Regionalism • Geopolitical

21. Made in USA • Found most of goods are foreign made • European countries prohibit processing financial information outside their border • National laws impact the profit and loss are analyzed • 員工分股費用化 • Currency fluctuation

22. 15.1 The growth of international info systems 15.2 Organizing international info systems 15.3 Managing global systems 15.4 Technology issues & opportunities for global value chains

23. 15.2 organizing international IS • Global strategies & Business organization • Four main global strategies • Domestic exporter • Multinational • Franchiser • transnational • Three organizational governance • Centralized • Decentralized • Coordinated

24. Domestic exporter • Heavy centralization of corporate activities in the home country • International sales are sometime dispersed • Ex: movie industry • Multinational • Centralized: financial control, … • Decentralized: production, sales and marketing, … • Ex: General Motors, 香港-利豐

25. Franchise • Product is created, designed, financed, and initially produced in the home country • Product-specific reasons must be rely heavily on foreign personnel • Ex: McDonald’s • Transnational • No single national headquarters • Many regional headquarters • Ex: Citicorp

26. Forces for • Decentralization • Protectionism • Serve local markets better • Centralization • Economies of scale • Power & authority

27. Global systems to fit the strategy • Centralized systems • Systems development and operation • Domestic home base • Duplicated systems • Development at home base • Operations over foreign location • Decentralized systems • Each foreign units design its own unique solution

28. Networked systems • Systems development & operations in an integrated & coordinated fashion

29. Reorganizing the business principles for developing global info systems • Organizing value-adding activities along lines of comparative advantage • Located where they can best be performed

30. Develop & operate systems units at each level of corporate activity • To serve local needs • Host country systems • To handle telecommunication, systems across national boarder • Regional systems • To create linkage, coordinate development • Transnational systems

31. World headquarter • Office responsible for development of international systems

32. 15.1 The growth of international info systems 15.2 Organizing international info systems 15.3 Managing global systems 15.4 Technology issues & opportunities for global value chains

33. 15.3 managing global systems • Disorganization on a global scale • Multinational companies • Dispersed production & marketing • Regional & national center • Centrally financial control • World headquarter

34. Challenges • Resistance the efforts to agree on common user requirement • Local needs vs. central interest • Change local procedures to align other units • Might interfere local performance • Difficult to coordinate development across the globe

35. Global systems strategy

36. Global systems strategy (步驟 1) • Define the core business processes • Identify & set priority of a list of critical core business processes • Communicate & coordinate • Work • Information • Knowledge • Conduct business process analysis • How are orders taken? • How are they shipped? • …

37. Identify center of excellence • Division or unit stands out in the performance • Rank-order them

38. Global systems strategy (步驟 2) • Identify the core systems to coordinate centrally • Identify a list of core systems to an absolute minimum • Dividing off a small group of systems as absolutely critical • Divide opposition

39. Global systems strategy (步驟 3) • Choose an approach: Incremental, Grand design, Evolutionary • Avoid • Piecemeal approach • Lack of visibility • Lack of power to convince senior management • Grand design • Require huge resources • Nothing get done properly • Evolve translational applications incrementally • Precise & clear vision of the transnational capability

40. Global systems strategy (步驟 4) • Make the benefits clear Global systems’ contributions • Contribute to superior management & coordination • Ability to switch suppliers • Ability to move production • Ability to use excess capacity • Vast improvement in production, operation, and supply and distribution • Locate value-adding activities to most economical region

41. Global customers & global marketing • Unleash new economies of scale • Ability to optimize the use of corporate funds • Capital in surplus region can be moved efficiently • Cash can be managed more effectively

42. The management solution to problems of developing the global IS • Agreeing on common user requirements • Establishing short list of • Core business process • Core support systems • Process of rational comparison • Develop a common language for discussing

43. Select a viable change strategy Introducing changes in business process • Evolutionary but with a vision • Convincing others that changes is feasible & desirable • Assure others that change is in the best interests of company & their units • Coordinating applications development • making incremental steps toward a larger vision • easier to coordinate

44. Coordinate software releases • Ensure that all operating units convert to newer software updates at the same time

45. Encouraging local users to support global systems • Dealing resistance from local units • Cooptation (抽選、 統整合作) • Bring the opposition into the process of designing • Implementing the solution without giving up control over the direction and nature of change

46. How should cooptation proceed • Permit each country unit the opportunity to develop one transnational system • Sense of ownership • Downside Assume the ability to develop high-quality system is widely distributed not always the case

47. Develop new transnational centers of excellence • Initial identification & specification of business processes • Define the info requirements • Perform the business & system analysis • Accomplish all design and testing • Roll out implementation to other parts of the globe

48. 15.1 The growth of international info systems 15.2 Organizing international info systems 15.3 Managing global systems 15.4 Technology issues & opportunities for global value chains

49. 15.4 technology issues and opportunities forglobal value chains Offshore challenges • Managing global teams & global technology services • Technology challenges of global systems • Standardize a global computing platform • Finding specific software applications to be used worldwide • Internet reduce network problems • Info might not flow seamless • Different application software

50. Technology challenges of global systems • Computing platforms and systems integration • New transnational systems vs. • Existing suite of applications • Globally dispersed • Different division • Different people • Different hardware