The World is Flat by Thomas L. Friedman

1. The World is Flatby Thomas L. Friedman Jason C.H. Chen, Ph.D. Professor of MIS Graduate School of Business Gonzaga University Spokane, WA 99223 USA chen@jepson.gonzaga.edu

2. “When I was growing up in Minneapolis, my parents always said, “Tom, finish your dinner. There are people starving in China and India.” • Today I tell my girls, “Finish your homework, because people in China and India are starving for your .” • And in a flat world, they can have them, because there’s no such thing as an American anymore.” Thomas L. Friedman jobs jobs

3. A Topic about … • Chances are good that Bhavya in Bangalore will read your next x-ray, or as Thomas Friedman learned first hand, “Grandma Betty in her bathrobe” will make your Jet Blue plane reservation from her Salt Lake City home. In “Globalization 3.0,” Friedman contends, people from far-flung places will become principal players in the marketplace. OUTSOURCING The World is Flat 3.0 http://mitworld.mit.edu/video/266 http://mitworld.mit.edu/video/519

4. In his latest book, The World is Flat, Friedman describes the unplanned cascade of technological and social shifts that effectively leveled the economic world, and “accidentally made Beijing, Bangalore and Bethesda next-door neighbors.” Today, “individuals and small groups of every color of the rainbow will be able to plug and play.” Friedman’s list of “flatteners” includes the fall of the Berlin Wall; the rise of Netscape and the dotcom boom that led to a trillion dollar investment in fiber optic cable; the emergence of common software platforms and open source code enabling global collaboration; and the rise of outsourcing, offshoring, supply chaining and insourcing. Friedman says these flatteners converged around the year 2000, and “created a flat world: a global, web-enabled platform for multiple forms of sharing knowledge and work, irrespective of time, distance, geography and increasingly, language.” At the very moment this platform emerged, three huge economies materialized -- those of India, China and the former Soviet Union --“and three billion people who were out of the game, walked onto the playing field.” A final convergence may determine the fate of the U.S. in this final chapter of globalization. A “political perfect storm,” as Friedman describes it -- the dotcom bust, the attacks of 9/11, and the Enron scandal -- “distract us completely as a country.” Just when we need to face the fact of globalization and the need to compete in a new world, “we’re looking totally elsewhere.”

5. Ten Flatteners • 1. Fall of the Berlin WallThe events of November 9, 1989, tilted the worldwide balance of power toward democracies and free markets. • 2. Netscape IPOThe August 9, 1995, offering sparked massive investment in fiber-optic cables. • 3. Work flow software The rise of apps from PayPal to VPNs enabled faster, closer coordination among far-flung employees. • 4. Open-sourcing Communities uploading and collaborating on online projects. Examples include open source software, blogs, and Wikipedia . • 5. Outsourcing Migrating business functions to India saved money and a third world economy. • 6. Offshoring Contract manufacturing elevated China to economic prominence. • 7. Supply-chaining Robust networks of suppliers, retailers, and customers increased business efficiency. See Wal-Mart. • 8. Insourcing Logistics giants took control of customer supply chains, helping mom-and-pop shops go global. See UPS and FedEx. • 9. In-forming Power searching allowed everyone to use the Internet as a "personal supply chain of knowledge." See Google. • 10. Wireless Like "steroids," wireless technologies pumped up collaboration, making it mobile and personal.

6. The Driving Forces Behind Outsourcing • Two main drivers • focus • on core business • value • shareholder TM -6 Dr. Chen,Managing IT Reos. Thru Strategic Partnerships; A Portoflio Approach to IT Development

7. Outsourcing • The purchase of a good or service that was previously provided internally. • Drivers include: • Disadvantages are present in outsourcing and include • Backsourcing is when a company brings back previously outsourced IS functions. • Reducing costs; • Transition to new technologies; • Focus on core business strategies; • Provide better management and focus of IT personnel. • Losing control, • Expensive to undue decisions, etc.

8. Sustainable Competitive Advantages • Any sustainable competitive advantages? • How can an organization sustain its competitive advantage? • Firms may create/improve their competitive advantages only if they: • have to learn, capacity • learning to learn and learning to change (life-long learning environment)

9. SOURCING DECISION CYCLE FRAMEWORK

10. Where & how the sourcing should be delivered? (overseas subsidiary) (distant land) (proximate) FIGURE SOURCING DECISION CYCLE FRAMEWORK