The Globalization of Information Technology in Multinational Corporations.One of the most significant business trends during the 1990s has been the sharp increase in global business activity and, despite recent economic turmoil in Asia and Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. , there is no sign that this growth will abate abate v. to do away with a problem, such as a public or private nuisance or some structure built contrary to public policy. This can include dikes which illegally direct water onto a neighbors property, high volume noise from a rock band or a factory, an improvement . The explosive growth of the Internet and the World Wide Web -- technologies that are inherently global in character -- has been of equal or even greater significance. These trends create unprecedented challenges and opportunities for multinational companies.
For information managers of multinational companies to respond effectively, they need to be fully conversant CONVERSANT. One who is in the habit of being in a particular place, is said to be conversant there. Barnes, 162. with important issues related to the international aspects of document technologies and business recordkeeping. This brief introduction is written for information specialists -- i.e., computer systems specialists document management or knowledge management specialists, records managers, and others -- involved in international initiatives at multinational corporations
Multinational Companies and Global Business
For multinational companies today, global customers demand global products. Further, multinational businesses can realize cost advantages in traditional input factors such as labor and raw materials. Finally, multinational companies endeavor to leverage their investment in knowledge and technology on a global basis. For example, global pharmaceutical companies operate research and development labs in Europe, Asia, and North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . They perform new drug development at whatever location has the best scientific expertise to do it -- or indeed at all global locations simultaneously -- and share data throughout the world.
Computer networks allow multinational companies to provide worldwide, real-time services all the time. Customer requests can be transferred across continents and time zones without the customer ever knowing that the work is done on the other side of the world. For the first time ever, time and space independence is achievable for any business that operates in global markets. Thus, enabled by new technology, today's global businesses are not so much multinational as they are transnational.
As the world economy continues to globalize glob·al·ize
tr.v. glob·al·ized, glob·al·iz·ing, glob·al·iz·es
To make global or worldwide in scope or application.
glob and integrate, the imperatives for management to act in a globalized manner become more crucial. Companies must therefore rethink and reengineer their entire business processes -- their organizational structures This article has no lead section.
To comply with Wikipedia's lead section guidelines, one should be written. , staffing, and especially their information systems and technology infrastructures on an international level. Those which fail to do this will never be able to attain or maintain a competitive edge in global markets.
Globalizing the IT Infrastructure
To understand international information management for multinational corporations, it is essential to understand the agendas of information technology departments as they attempt to extend their global reach throughout the economies of many countries. Globalized IT agendas reflect current trends in the global economy: greater integration of mature markets, newly emerging markets, common currencies (e.g., the Euro), new trading partners, and the overriding impact of the Internet and its related technologies in stimulating global business activity. For IT departments in multinational companies, these trends mean greater worldwide standardization standardization
In industry, the development and application of standards that make it possible to manufacture a large volume of interchangeable parts. Standardization may focus on engineering standards, such as properties of materials, fits and tolerances, and drafting of computing platforms See platform. , vastly increased global information flows, and many other technical, legal, and cultural issues.
The goal of IT departments of multinational companies can be simply stated: To create globally integrated information infrastructures that electronically link their entire supply chains -- their sales, production, and delivery processes -- into one seamless flow of information across national borders and time zones, with both real-time and store-and-forward access to information from any location. The global corporate network thus becomes the entire knowledge repository of the enterprise and the key delivery system for supporting global business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets .
Executives of multinational companies see many benefits to this global integration of information systems, including shorter cycle and delivery times, closer relationships with business partners, greater flexibility in sourcing products or services, better inventory controls, and of course, improved customer satisfaction, cost reductions, and increased profits. In short, a more competitive business.
The foregoing business goals provide compelling justification for multinational companies to achieve worldwide integration of information systems, but how much has actually occurred? According to according to
1. As stated or indicated by; on the authority of: according to historians.
2. In keeping with: according to instructions.
3. a recent survey of more than 400 multinational IT managers conducted by Information Week magazine, global businesses have a long way to go before truly globalized information systems are in place. The survey results indicate that only 36 percent of U.S. companies that purchase or sell products, services, or data over electronic networks do so in countries outside the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. .
Indeed, IT departments that attempt to implement global information systems must confront a host of vexing issues. These include cultural and language differences, legal issues associated, with transborder data flow, tax requirements and other government regulations, telecommunications costs and reliability, problems associated with developing custom applications, staffing issues, and many others. While each of these problems can be overcome, in the words of Lew Platt, Hewlett-Packard's chief executive officer, "It's just hard."
On the other hand, some aspects of globalizing IT infrastructures are getting easier. Intranets and extranets provide relatively easy (and inexpensive) ways to exploit the global nature of the Internet. The Internet is also making it easier to find small and midsize suppliers and other businesses throughout the world with which larger multinationals can establish strategic partnerships.
Examples of IT Globalization globalization
Process by which the experience of everyday life, marked by the diffusion of commodities and ideas, is becoming standardized around the world. Factors that have contributed to globalization include increasingly sophisticated communications and transportation
Examples of IT departments pursuing global agendas include
Cap Gemini Sogeti -- During the mid-1990s, this French company with operating units operating unit
A type of operating company that engages in transactions with outsiders and that is owned by another business. For example, in 1995 the stockholders of Capital Cities/ABC approved a $19 billion merger with the Walt Disney Company, whereupon in the U.S. and Europe made a $40 million investment to become more transnational. The company chose English as a common language for all correspondence and business documentation, and adopted common service offerings regardless of which country or market it entered. Standardization of the global IT infrastructure was crucial to the success of this effort.
Nike Inc. -- This U.S.-based manufacturer of athletic footwear is implementing a global electronic supply chain in order to share information with its partners around the world and facilitate better decision making. Management of the global supply chain is defined as the worldwide management of raw materials, parts, and skills from original suppliers, through the manufacturing and production processes, and finally to the end user/customer. The company anticipates a dramatic increase in IT spending in order to achieve these goals. One major problem: many business processes, particularly those of partners at overseas sites, are still manual and paper-based, and new document technologies must be assimilated. The company's goal is to implement these technologies and achieve a streamlined electronic supply chain process at 100% of its partners' locations worldwide.
The Body Shop -- This British-based retailer of skin and hair-care products is creating an intranet to link the head offices in each of the 47 countries in which it operates with its headquarters office in the United Kingdom. The company anticipates that its intranet will enable it to exploit globally available and supportable hardware, servers and databases, and it expects to derive many competitive advantages from this global integration.
Tricon Global Restaurants Inc. -- This U.S.-based operator of some 30,000 fast food restaurants (Pizza Hut, Taco Bell Taco Bell Corp., a subsidiary of Yum! Brands, Inc., is a Mexican-style quick service restaurant chain based in Irvine, California, United States. The restaurant has locations primarily in the United States and Canada, but also operates outlets in several other markets. , and KFC KFC Kentucky Fried Chicken (restaurant chain)
KFC Kenya Flower Council
KFC Kitchen Fresh Chicken (Kentucky Fried Chicken motto)
KFC Kung Fu Cult (Cinema)
KFC Kitchen Fixed Charge ) is standardizing its back office operations at all stores throughout the world. When fully implemented, the company's new proprietary global information system will permit all stores to order supplies through one global clearinghouse. For the first time, Pizza Hut, Taco Bell, and KFC brands will be supported by a single unified information system. Among many other benefits, the system will allow Tricon's headquarters to provide supply ordering guidelines guidelines,
n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. to franchisees worldwide, a move which could substantially reduce inventory and related costs.
Sealand Services Inc. -- This U.S.-based global shipping company is implementing a new proprietary shipping management system that will automate customer transactions worldwide, including order taking and document management. The system will integrate functions such as sea- and land-based shipment tracking, payment processing, and container movement at cargo terminals.
Eastman Kodak Co. -- Several years ago, this large, U.S.-based multinational company undertook a massive, global IT integration project that involved consolidating 17 data centers on four continents into seven. The goal was tighter, if not more centralized cen·tral·ize
v. cen·tral·ized, cen·tral·iz·ing, cen·tral·iz·es
1. To draw into or toward a center; consolidate.
2. , global management of Kodak's IT infrastructures. The company chose IBM's Integrated Systems Solutions Corp. to implement the global integration. Other leading global IT integrators include Unisys Corp., Price Waterhouse Coopers & Lybrand, Electronic Data Systems Corp., and KPMG KPMG Klynveld Peat Marwick Goerdeler (accounting firm)
KPMG Kaiser Permanente Medical Group
KPMG Keiner Prüft Mehr Genau (German)
KPMG Kommen Prüfen Meckern Gehen Peat Marwick.
Cisco Systems “Cisco” redirects here. For other uses, see Cisco (disambiguation).
Cisco System,Inc. (NASDAQ: CSCO, HKSE: 4333 ) is an American multinational corporation with 54,000 employees and annual revenue of US $28.48 billion as of 2006. -- This U.S.-based Internet networking solutions company spent $10 million on a project to globalize all its Oracle databases and applications -- a complete revamp re·vamp
tr.v. re·vamped, re·vamp·ing, re·vamps
1. To patch up or restore; renovate.
2. To revise or reconstruct (a manuscript, for example).
3. To vamp (a shoe) anew.
n. of its core legacy systems, including order entry, manufacturing, and financial systems. The project linked 10 primary sites in North America and Japan, and more than 100 sales offices to global users across the company's worldwide private network.
Enabling Technologies for IT Globalization
IT departments are using a wide variety of tools, both old and new, to implement global supply chains and accomplish other goals related to globalization of the IT infrastructure. A few of these include:
* Electronic Document Interchange -- EDI (Electronic Data Interchange) The electronic communication of business transactions, such as orders, confirmations and invoices, between organizations. Third parties provide EDI services that enable organizations with different equipment to connect. is an old technology for exchanging information, but it is still the solution of choice for much of the world and thus remains a prime strategy for multinationals as they establish electronic links with their trading partners and other external parties. For example, in the Tricon project mentioned above, it is EDI that enables restaurant stores around the world to order supplies through a single global clearinghouse.
* Enterprise Resource Planning See ERP.
(application, business) Enterprise Resource Planning - (ERP) Any software system designed to support and automate the business processes of medium and large businesses. (ERP (Enterprise Resource Planning) An integrated information system that serves all departments within an enterprise. Evolving out of the manufacturing industry, ERP implies the use of packaged software rather than proprietary software written by or for one customer. ) Applications -- ERP software is an integrated, enterprisewide solution designed to link previously isolated departments and business processes. Multinational businesses increasingly use enterprise software, in particular ERP applications, to globalize supply chains into a single end-to-end system.
* SAP Enterprise Software -- SAP, based in Germany, is a leading client/server software company. The company's R/3 software product is used widely by many multinationals, as well as many smaller companies, in their supply chains. The global deployment of this enterprise solution has helped establish standards for exchanging data, especially among closely knit Adj. 1. closely knit - held together as by social or cultural ties; "a close-knit family"; "close-knit little villages"; "the group was closely knit"
close - close in relevance or relationship; "a close family"; "we are all... supply chains.
Electronic Document Management Technologies
Multinational companies are exploiting several document technologies for competitive advantage in their global infrastructures. As used here, the term "electronic document management" (EDM (Engineering Data Management) An information system that maintains the details of all engineering data while the product is in the design and concept phase. This includes geometry and changes to geometry. See PLM.
EDM - Electronic Data Management ) applies to several distinct technologies that are frequently combined in a variety of ways to provide for the storage, retrieval and other management of an organization's document-based information systems. The key technologies include:
* Document Management (DM) -- Systems that provide for the management of unstructured documents typically created by desktop computer systems. DM systems help organize the production of electronic documents and provide for their access and distribution over networks, at both the workgroup and enterprise levels. Features commonly supported by DM systems include access control, version control, audit trail, and many others. The more sophisticated systems support document objects such as voice and video clips A short video presentation. and Web documents.
* Full Text Retrieval -- Systems that enable users to retrieve textual documents based on words, phrases or concepts contained in the documents, which may be stored in a text database or other document repository. This technology facilitates the location and use of documents based on their full content, rather than on conventional file or document identifiers such as title, author, subject, or other descriptors.
* Electronic Document Imaging -- Systems that convert paper-based documents to digital format, usually for storage on optical media. Computer output to laser disk Computer Output to Laser Disk - Enterprise Report Management (COLD) includes systems that provide for the near-line storage of computer data on optical media.
* Film-based Imaging -- Systems that provide for the capture of documents and data on microfilm A continuous film strip that holds several thousand miniaturized document pages. See micrographics.
Microfilm and Microfiche and microfiche Pronounced "micro-feesh." A 4x6" sheet of film that holds several hundred miniaturized document pages. See micrographics. . This older document technology (based on photographic media and serial search methodologies) is expected to continue to decline in terms of its share of the overall document market. However, because it is free of hardware and software dependencies, many observers believe film-based imaging will continue to play a viable role as a medium for the long-term archival storage of documents.
* Workflow -- Systems that provide for the automation of business processes by providing the capability to define, analyze, and track work processes, as well as schedule, control, and route electronic documents and other work items around the enterprise. Workflow applications A workflow application is where various applications, components and people must be involved in the processing of data to complete an instance of a process. For example, consider a purchase order that moves through various departments for authorization and eventual purchase. tend to be targeted at transaction-type work environments where large volumes of paper-based transactions are taking place, particularly in cases where the transactions take longer to complete than is desirable, due to the limitations of manual processing.
Many other technologies are also of high importance to EDM's deployment, including database management systems, groupware Software that supports multiple users working on related tasks in local and remote networks. Also called "collaborative software," groupware is an evolving concept that is more than just multiuser software which allows access to the same data. , and Internet-related technologies (i.e., the World Wide Web, browsers, intranets, extranets). Multinational businesses throughout the world are aggressively implementing these solutions largely because of the inefficiencies associated with manual, paper-based document systems. A few examples:
* Swisscom, one of Europe's leading telecommunications and networking companies, has installed a new workflow system supplied by CSE (Certified Systems Engineer) See Microsoft certification. Systems Corp., an Austrian document technology company. The primary objective is to accelerate the flow of information throughout the enterprise, which employs approximately 21,000 people. The system provides an intranet gateway for distribution of documents and data within the company and to external parties.
* Sparbanken Sverige AB, a large Swedish financial services The examples and perspective in this article or section may not represent a worldwide view of the subject.
Please [ improve this article] or discuss the issue on the talk page. company, has implemented BASIS Intranet, an electronic document management system supplied by Information Dimensions of Dublin, Ohio Dublin is a city in Delaware, Franklin, and Union counties in the U.S. state of Ohio. The population was 31,392 at the 2000 census. In 2006, the population was estimated to be 36,565, and Dublin continues to be one of the fastest-growing suburbs of Columbus. . [Editor's Note Editor's Note (foaled in 1993 in Kentucky) is an American thoroughbred Stallion racehorse. He was sired by 1992 U.S. Champion 2 YO Colt Forty Niner, who in turn was a son of Champion sire Mr. Prospector and out of the mare, Beware Of The Cat.
Trained by D. : Information Dimensions is now owned by Open Text Corporation.] The system includes Netscape's Web-based software products and provides a common interface for the storage and retrieval of e-mail and other unstructured desktop documents. In its initial deployment, the system will support 800 users, with subsequent scaling to 11,000 seats.
* Boland Bank of Cape Town Cape Town or Capetown, city (1991 pop. 854,616), legislative capital of South Africa and capital of Western Cape, a port on the Atlantic Ocean. It was the capital of Cape Province before that province's subdivision in 1994. , South Africa South Africa, Afrikaans Suid-Afrika, officially Republic of South Africa, republic (2005 est. pop. 44,344,000), 471,442 sq mi (1,221,037 sq km), S Africa. , has implemented Microbank's Stor/QM Report Mining software. This COLD imaging solution provides nearline data storage and eliminates the archiving of 50,000 pages of check transaction data to microfiche every quarter. The system has reduced the data access time to a fraction of the old fiche Same as microfiche. system, and the bank expects to achieve a return on its investment within 12 months.
The International Aspects of EDM
International Data Corporation recently completed an international survey of EDM technologies market for AIIM (Association for Information and Image Management International, Silver Spring, MD, www.aiim.org) A membership organization founded in 1943 devoted to creating industry standards and disseminating information about the document management industry. International, a U.S.-based association representing IT professionals specializing in document technologies and management. The survey contains historical data from 1996 and 1997, and provides growth forecasts from 1998 through the year 2002. The survey data, collected from 1,444 respondents in 20 countries, encompasses electronic imaging, workflow, document management, full-text retrieval, and film-based imaging.
As shown in Table 1, the document technologies market is dominated by the United States. The technologies have largely been developed by U.S. suppliers and as a result, the U.S. is the domestic market for the majority of vendors. Moreover, many of the world's largest leading adopters of EDM are U.S.-based companies.
Table 1 -- Global EDM Market: 1997 Revenues(*) by Country COUNTRY REVENUES COUNTRY REVENUES Argentina $90 Korea $60 Australia/N. Zealand 286 Mexico 145 Belgium 148 Netherlands 68 Brazil 192 Scandinavia 112 Canada 276 Southeast Asia(**) 103 France 240 Taiwan 18 Germany 346 United Kingdom 923 Italy 176 United States 6,094 Japan 643 Other countries 404
(*) Revenues in millions, U.S. dollars, and include EDM, full text retrieval, workflow software, electronic and film-based imaging. (Source: AIIM/International Data Corp.)
(**) Includes the Southeast Asian nations Noun 1. Asian nation - any one of the nations occupying the Asian continent
country, land, state - the territory occupied by a nation; "he returned to the land of his birth"; "he visited several European countries" of Singapore, Malaysia, Indonesia, and Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. , a Special Administrative Region of the People's Republic of China A Special Administrative Region is an administrative division of the People's Republic of China. Each SAR has a Chief Executive as head of the region and head of government. .
Total worldwide 1998 revenues for the EDM market (including full-text retrieval, imaging, workflow, and related document technologies) were just under $14 billion, but forecasts call for a 19.4 percent compound annual growth rate over the next five years.
The U.S. market for document technologies is expected to remain strong; however, growth in overseas markets is expected to exceed growth in the U.S. during the next five years.
Electronic document technologies are evolving from application-specific to enterprise-wide deployments that are being implemented over the Internet and corporate intranets.
A widespread recognition that knowledge is power fuels the development of new document technologies; thus, the flow of information needs to reach across the enterprise, rather than to just a few selected areas.
EDM is currently a relatively small niche product category that has yet to evolve into a general computing tool for most enterprises. However, because the majority of enterprise information exists in document form, the potential for document management technologies is considered by most observers to be very great.
Global Trends in Document Technologies
According to International Data Corp., several key trends are currently driving and redefining the global document technologies market:
1. The Internet, corporate intranets, and related technologies are by far the most important global trend in new document technologies. Document technologies have been fundamentally changed by the Web, as the economics of deploying these technologies to thousands of users has dramatically improved. Moreover, the Web is increasingly playing a key role as a medium for distributing document-based information.
2. The development and widespread acceptance of technical standards is of crucial importance to the global EDM market as it evolves from proprietary, application-specific workgroup environments to enterprise-wide solutions for the management of electronic documents and data on every desktop. These interoperability The capability of two or more hardware devices or two or more software routines to work harmoniously together. For example, in an Ethernet network, display adapters, hubs, switches and routers from different vendors must conform to the Ethernet standard and interoperate with each other. standards are designed to create bridges connecting document repositories on disparate platforms throughout the enterprise.
3. The increasing degree of integration between different types of document information systems is evident as vendors develop integrated product suites that provide any combination of EDM, imaging, workflow, full text retrieval, and other required functionality.
4. The scalability of EDM solutions from the single workgroup level to enterprise-wide deployments is critical to success.
In summary, document technology is rapidly evolving toward a "single point of access" that will allow each individual in a multinational company's user community to access any and all information in the enterprise document store, regardless of its location, data structure, storage media, or other aspects of system infrastructure or organizational environment.
Future columns will address other IT issues confronting multinational businesses (e.g., transborder data flows, cultural and legal issues) and will examine using Internet and World Wide Web resources to conduct research on these issues.
Abramson, Gary. "IT Phone Home-, The Global Enterprise." CIO CIO: see American Federation of Labor and Congress of Industrial Organizations.
(Chief Information Officer) The executive officer in charge of information processing in an organization. Enterprise. February 15, 1999.
Association for Information and Image Management The Association for Information and Image Management or AIIM (pronounced aim) is an international industry association focused on enterprise content management (ECM). . State of the Document Technologies Market, 1996-2002. 1998.
Ball, Don and McCulloch, Wendell. International Business: The Challenge of Global Competition. 1999.
Bradley, Stephen P., Hausman. Jerry A., and Nolan, Richard L. Globalilzation, Technology and Competition. 1993.
Cunningham, Mike. "The Perils of International E-commerce: A Risk Worth Taking?" Inform. October 1998.
Dalton, Gregory. "Global Gravity, Companies Seek End-to-End Information Systems." Informationweek. January 18, 1999.
"Doing Business in the Internet Age: Annual Report on Information Technology." Business Week. June 22, 1998.
"Electronic Commerce." The Economist. May 10, 1997.
Emmett, Arielle. "Going Global." Computerworld. February 26, 1996.
Triangular section formed by a roof with two slopes, extending from the eaves to the ridge where the two slopes meet. It may be miniaturized over a dormer window or entranceway. , Julie. "The Role of Records Management in Electronic Document Management." Proceedings of the 41st Annual Conference, ARMA International. 1996.
Hammer, Michael. "Up the ERP Revolution." InformationWeek February 8, 1999.
O'Connell, John. "Streamlining Supply Chain Management." Document World. January/February 1999.
Ohmae, Kenichi. Triad Power -- The Coming Shape of Global Competition. 1985.
--. The Borderless World: Power and Strategy in the Interlinked Economy. 1991.
Slater, Derek. "An ERP Package For You." CIO. February 15, 1999.
Sullivan, Colin. "Document Technology at Work Around the World." Inform. October 1998.
Tungendhat, Christopher. The Multinationals. 1972.
Wilkins, Mira. The Maturing of the Multinational Enterprise. 1974.
Wrision, Walter. The Twilight of Sovereignty: How the Information Revolution is Transforming Our World. 1992.
David O. Stephens, CRM (Customer Relationship Management) An integrated information system that is used to plan, schedule and control the presales and postsales activities in an organization. , CMC (Common Messaging Calls) A programming interface specified by the XAPIA as the standard messaging API for X.400 and other messaging systems. CMC is intended to provide a common API for applications that want to become mail enabled.
1. , is Vice President of the Records Management Consulting Noun 1. management consulting - a service industry that provides advice to those in charge of running a business
service industry - an industry that provides services rather than tangible objects Division at Zasio Enterprises Inc. He has been a consultant in the field of records management for more than 18 years, and has published books and articles about information management in the United States and abroad. The author may be reached at email@example.com.