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Information system development in a global environment.

The growing need for the marketing of U.S. goods and services abroad presents a quandry for information systems that link the many components of offshore business with home off ices. With markets open around the clock, there is a need to create information systems that can cross time zones, governments, languages, and currencies. As a result, this author says only one approach is best for information system development.

American goods and services must compete today in the international marketplace with the power centers of Asia, the European Community, and soon, the newly free Eastern European states - to name but a few. American managers face the reality that they too must expand and compete in overseas markets to realize sustained market share and to reap the benefits of continued business growth. Procter and Gamble's expansion of its Tide detergent to nearly every consumer market around the world is a prime example of the international expansion of goods and services by American firms. Expansion means creation of mergers or strategic cooperative partnerships with firms abroad, such as the General Motors and Toyota [with its joint venture on Geo automobiles). The globalization of business means the creation of a physical presence market overseas to put products and services closer to their intended markets. An example is BMWs plans to build an automotive plant in South Carolina.

Of particular importance in this new global push is a domestic organization's information systems. Manufacturing organizations must be able to manage and organize operations in different countries, with different currencies, suppliers, and labor rules. Financial organizations have already recognized that, with the use of advanced information and telecommunications technology, markets are essentially open 24 hours a day. To remain competitive, they must trade in monetary markets in London, New York, and Tokyo at any one time of the business day. in today's global marketplace, consumer goods can be as viable in Far Eastern and Middle Eastern markets as they are in a domestic market. The backbone for all these global endeavors will be the business' information systems which store, manipulate, and disseminate the data generated by daily business activity.

Compared with the goods and services they sell, American managers are discovering that information systems are not as general and transportable across national borders. An information system of a multinational business organization is vastly more varied and complex than one of its domestic operations. Multinational information systems must have the capacity to cross multiple time zones, governments, languages, and currencies. What will be of primary concern is how to develop high quality information systems quickly enough to support organizational decision makers as they operate in this expanded environment. Two noted researchers assert, "Coordination is the key to competitive advantage."[1] Information systems can provide that coordination, but they must be developed fast enough to provide strategic support that the competition cannot easily or cheaply match.

Information systems managers must recognize that the playing field for information systems has now completely changed. A scenario in which information systems are designed for a single, homogenous group of users, or for support of a singular domestic operation, is fast becoming obsolete, yet information systems management clings to an orientation model that is largely national.[2] With ever-increasing international competition, U.S. businesses must realize the attempt to retain this orientation while attempting to compete in an international environment will hurt them strategically. Information systems development must be conceptualized as global, reflective of the global operations, to achieve strategic advantage. The issue an organization must then address is how to accelerate the information systems development cycle sufficiently to enable the company to realize a strategic advantage in the market.

To survive in a global market and achieve timely information systems development, systems must be developed, for the most part, locally.

System Development Process

Time spent in information system development will most likely be the major issue to be faced as market competition intensifies. Some researchers contend that the corporate player with the greatest ability to reduce uncertainty and deal with the increased complexity of the international competitive arena will stand the better chance of survival in the global market.[3] Time is critical. Information systems will play a significant role only if their products can be delivered fast enough to provide a strategic advantage. For example, information systems can be used to manage increasingly scarce resources more efficiently, but this strategic advantage will be lost if the systems are not conceptualized and implemented before the competitors'.

Traditional approaches to information systems development are unsatisfactory in providing timely delivery of information systems. Traditionally, the systems development process has centered around the identification of a business problem or opportunity that has some specific information component to be fulfilled. In this approach, systems are developed for one site, at one point in time, by a team of developers. Systems personnel analyze the existing situation, suggest changes to be made in the existing system, then design solutions that address the changes to be made. This analysis and design process is accomplished by conferring with the users of the existing systems. Development of major systems typically involves creationing additional electronic files, redesigning data collection methods, and formulating extensive employee training. These changes could also involve modification of computer hardware and the creation of new computer software programs. Years of development may be required between the time the information issue being addressed is identified and the new system is actually implemented_depending on its complexity and scope. Systems development projects lasting several years are not unusual.

Although not unusual, they are not desirable. At the present time, when the time of product development, as well as the length of the product life cycle, have both decreased dramatically, information systems development times must also be compressed significantly. The reality of geographical distance inherent in international operations dictates that development be approached in such a way that a high degree of coordination become possible between distant operational sites. The traditional approach to systems development cannot deal adequately with large groups of users across many different physical sites. Thus, the traditional information systems development scenario is antithetical to the actual situation information systems managers will face in the international organization.

Phillip Morris encountered many factors that hindered its efforts in international systems development[4] These factors included such issues as language barriers, differing regulations, the lack of global information product vendors, inadequate facilities in foreign operations, differing accounting standards and tax codes, and cultural barriers and biases. In a study of related issues, researchers point out that other difficulties include the lack of a consistent telecommunications infrastructure, lack of support for information systems projects from top management, complications in ensuring data security, and challenges with differing local postal, telephone, and telegraph utilities in the various countries.[5] Because of these difficulties facing information systems developers in the international arena, the time that will be required to develop quality information systems will increase if traditional approaches are used. In addition, ensuring coordination between remote sites will be extremely difficult. With the prospect of ever more borders crossed, the complexities in the traditional development cycle will be compounded exponentially if an organization pursues a centralized development approach.

Competitive pressures dictate that the traditional, national model of information systems development is not adequate to address this new international environment. A newer approach must emphasize greater development speed yet, at the same time, allow for individual multinational units to conform to their local environments. To facilitate coordination between units, data must flow between them. Upward connnectivity - allowing for overall coordination among units - must also be addressed.

The Local Approach

A more flexible and less coupled approach to development must be considered. The answer is an alternative that will push development into the local sites themselves and, hopefully, effect more rapid development and adoption.

This strategy is bottom-up, not top-down. With this "locality" approach, all development of information systems would happen at the local sites and radiate outward to the whole, not start at one central location in the whole and diffuse downward. The locus of origin in the development process is not important. The system development may or may not be initiated in a particular local site; it could just as easily come from a regional or world headquarters. The actual development of the system, however, would occur at that local site, using local content and information products. With some preplanning in the approach to development organizationwide, coordination and upward connectivity to the rest of the information infrastructure within the organization would not be a difficult issue to resolve, given that certain requirements and standards are imposed upon organizational units at the outset of any development. This preplanning should ensure system conformity that will facilitate data flows yet allow compliance with local standards and technology.

Using the following steps when approaching information system development, organizations with facilities in different localities should be able to develop autonomous, yet cohesive, systems faster than a single, concerted development project. The key to this development process is to allow for some standardization initially, then delegate the actual development to the personnel at the sites where the systems will be used.

Identity Critical Data: If a global system development project is necessary, the organization must identity the most critical data elements. This can be done the same way a business determines critical success factors. Data identification will dictate the minimum data elements that must be present to make a system connectable from site to site. This determination process initiates the formation of a global data dictionary, if one does not currently exist. At the local sites, any additional data elements beyond these can be used or stored as dictated by local regulations and requirements.

Standardize Data Formats: Once the data elements have been identified, the organization must standardize the format in which the data will be stored or transmitted. This refers to the size and characteristics of the data down to the lowest element level. Standardization will ensure that when data do need to flow transborder, they will already be in a format that will remain constant across organizational units in the data base, file, and record formats. This resolves issues of interface and connectivity.

Restrict Hardware/Software Configurations: To maximize the probability of connectivity among the individual sites, choices of hardware and software must be limited. All units must choose among a set of previously approved hardware and software products, which will allow for future connectivity as well as local autonomy. This will permit elements of self determination and local preferences in information technology and still set the stage for future connectivity upward.

Diffuse Technology: Whenever possible, provide training to the appropriate personnel at the local sites, and distribute the most current information technology as widely as possible. with the declining costs of information technology, hardware may be pushed lower into the organization. At the same time, these sites can assemble teams of information system development personnel from the local population. With the training mentioned above, coupled with familiarity of local environments, these personnel will be able to utilize newer software productivity tools to develop systems faster than a larger team working at a central site.

The Bottom Line

The traditional system development process is inadequate to respond to the dynamic environment inherent in the international business arena. With some coordination from the larger organization, a local approach to systems development will provide a winning plan. The systems could be customized to fit local operating environments, yet, at the same time, be upwardly connectable so that data could be transferred. Use of this approach could put a system on line much more quickly than traditional mode, and provide a competitive advantage as well.

[1] Cash, J., McFarlan, F., McKenney, J., and Applegate, L., Corporate Information Systems Management, Homewood, Il, Irwin Press, 1992. [2] Deans, P. Candace, and Ricks, David, "MIS Research: A Model For Incorporating the International Dimension," The Journal of High Technology Review, Vol. 2, No. 1, 1991, 57-81. [3] Karimi, Jahangir and Konsynski, Benn, "Globalization and Information Management Strategies," Journal of Management Information Systems, Vol. 7, No. 4, 1991, 7-26. [4] Porter, Michael and Millar, Victor, "How Information Gives You Competitive Advantage," Harvard Business Review, July-August 1985, 149-160. Roche, Edward, Managing Information Technology in Multinational Corporations, New York, Macmillan Pub., 1992.

Robert M. Barker, Ph.D., is an assistant professor of computer information systems in the School of Business at the University of Louisville, Louisville, Kentucky.
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Author:Barker, Robert M.
Publication:Business Forum
Date:Jan 1, 1993
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