Management Information Systems - NPTEL Lecture Notes PDF

Management Information Systems Prof. Surojit Mookherjee VGSoM, IIT KHARAGPUR Week 12: Managing Global Organizations and Global Projects Lecture 01 : Managing Global Organization - Globalization (Part1)  Learning Objectives  What major factors are driving the internationalization of business? ...

Management Information Systems Prof. Surojit Mookherjee VGSoM, IIT KHARAGPUR Week 12: Managing Global Organizations and Global Projects Lecture 01 : Managing Global Organization - Globalization (Part1)  Learning Objectives  What major factors are driving the internationalization of business?  What are the alternative strategies for developing global businesses?  What are the challenges posed by global information systems and management solutions for these challenges?  What are the issues and technical alternatives to be considered when developing international information systems?  What is meant by a Global Organization ( Globalization) ? International business refers to the trade of goods, services, technology, capital and/or knowledge across national borders and at a global or transnational life. It involves cross-border transactions of goods and services between two or more countries. Example - Apple Inc. Characteristics of a Global Organization  Large scale operations.  Earns foreign exchange in multiple currencies  Integrates economies.  Large number of middlemen.  High risk ( e.g. US - China trade conflict )  International restrictions.  Highly sensitive nature towards local laws and regulations  Global Political alignments / Trading Partnerships  Multi – Languages , Multi - Cultural What are the major Drivers (Factors) affecting International business  Transport ( Steam engine to Jet engine )  Communication ( Internet and Telekom )  Political  Economical  Social  Technological ( Computing power , Cloud , Video conferencing , Analytics , IT Security )  Legal Globalization Globalization* is the process of business integration among people, companies, and governments , across the world. It is primarily an economic process in integration with social and cultural aspects of the countries involved. So we have :  Economic Globalization  Cultural Globalization and  Political Globalization ( Belt and Road Initiative of China ) * Wikipedia Internet users by region a 2005 2010 2017 2019 Africa 2% 10% 21.8% 28.2% Americas 36% 49% 65.9% 77.2% Arab States 8% 26% 43.7% 51.6% Asia and 9% 23% 43.9% 48.4% Pacific Commonwe alth of 10% 34% 67.7% 72.2% Independen t States Europe 46% 67% 79.6% 82.5% a Estimate. Source: International Telecommunication Union. * Wikipedia  What Major Factors Are Driving the Internationalization of Business? Global economic system and global world order driven by advanced networks and information systems The growth of international trade has radically altered domestic economies around the globe For example, production of many high-end electronic products parceled out to multiple countries For example: Apple iPhone’s global supply chain Samsung’s Mobile phone manufacturing  Strategy for developing an International Information Systems Architecture Understand global environment Business drivers for global competition Inhibitors creating management challenges Multi – cultural aspects of employees and partners Develop corporate strategy for global competition Develop organizational structure and division of labor Consider management issues Design of business procedures, reengineering, managing change Consider technology platform International Information Systems Architecture Global Environment : Business Drivers and Challenges Corporate Global Strategies Top – Down Strategy Organization Structure Management Strategies Business Processes Technology Platforms The Global Environment: Business Drivers and Challenges …. General cultural challenges Cultural particularism Social expectations Political laws Specific challenges Standards Reliability Speed Personnel The Global Environment: Business Drivers and Challenges …. GENERAL CULTURAL FACTORS SPECIFIC BUSINESS FACTORS Global communication and Global markets transportation technologies Development of global culture Global production and operations Emergence of global social norms Global coordination Political stability Global workforce Global knowledge base Global economies of scale Challenges and Obstacles to Global Business Systems GLOBAL SPECIFIC Cultural particularism: Standards: Different Electronic Regionalism, nationalism, language Data Interchange (EDI), e-mail, differences telecommunications standards Social expectations: Brand-name Reliability: Phone networks not expectations, work hours uniformly reliable Political laws: Transborder data and Speed: Different data transfer privacy laws, commercial speeds, many slower than United regulations States - Personnel: Shortages of skilled consultants State of the Art Most companies have inherited a patchwork international system using traditional batch- oriented reporting, manual data entry, legacy systems, and little online control. Significant difficulties in building appropriate international architectures Planning a system appropriate to firm’s global strategy Structuring organization of systems and business units Solving implementation issues Choosing right technical platform REFERENCES  Management Information Systems: Managing the Digital Firm - Kenneth C. Laudon & Jane P. Laudon – Ch 15  The World is Flat : Thomas L Friedman  Enterprise Resource Planning, Rajesh Ray, Tata McGraw-Hill Management Information Systems Prof. Surojit Mookherjee VGSoM, IIT KHARAGPUR Week 12: Managing Global Organizations and Global Projects Lecture 02 : Managing Global Organizations – Part 2  Global Strategies and Business Organization…. Three main kinds of organizational structure Centralized: In the home country Decentralized/dispersed: To local foreign units Coordinated: All units participate as equals  Global Strategies and Business Organization Four main global strategies Domestic exporter ( e.g. Tata Motors ) Multinational ( e.g. IBM ) Franchisers ( e.g McDonalds ) Transnational ( e.g. Coca Cola ) Transnational corporations share many qualities with multinational corporations, with the difference being that multinational corporations consist of a centralized management structure, whereas transnational corporations generally are decentralized, having country specific controls.  Global Systems to Fit the Strategy Configuration, management, and development of systems tend to follow global strategy chosen Four main types of systems configuration Centralized: Systems development and operation occur totally at domestic home base Duplicated: Development occurs at home base but operations are handed over to autonomous units in foreign locations Decentralized: Each foreign unit designs own solutions and systems Networked: Development and operations occur in coordinated fashion across all units  Reorganizing the Business To develop a global company and information systems support structure: 1. Organize value-adding activities along lines of comparative advantage For example: Locate functions where they can best be performed, for least cost and maximum impact. 2. Develop and operate systems units at each level of corporate activity—regional, national, and international 3. Establish at world headquarters: Single office responsible for development of international systems Global CIO position  A Typical Scenario: Disorganization on a Global Scale A traditional multinational consumer-goods company based in United States and operating in Europe would like to expand into Asia World headquarters and strategic management in United States Separate regional, national production and marketing centers Foreign divisions have separate IT systems E-mail systems are incompatible Each production facility uses different ERP system, different hardware and database platforms, and so on Global Systems Strategy (1 of 3) Share only core systems Core systems support functionality critical to firm (e.g. key business processes like Procurement , Pricing , Manufacturing , Inventory ) Partially coordinate systems that share some key elements Do not have to be totally common across national boundaries Local variation desirable ( e.g. HR , Finance ) Peripheral systems Need to suit local requirements only ( e.g. Tax rules )  Global Systems Strategy (2 of 3) Define core business processes Identify core systems to coordinate centrally Communicate across organization leadership for Change Management Choose an approach Piecemeal and grand design approaches tend to fail  Global Systems Strategy (3 of 3) Make benefits clear Global flexibility Gains in efficiency Global markets and larger customer base unleash new economies of scale at production facilities Optimizing corporate funds over much larger capital base The Management Solution: Implementation (1 of 2) Agreeing on common user requirements Short list of core business processes Develop common language, understanding of common elements and unique local qualities Introducing changes in business processes Success depends on legitimacy, authority, ability to involve users in change design process Coordinating applications development Coordinate change through incremental steps Reduce set of transnational systems to bare minimum Issues and Technical Alternatives When Developing International Information Systems (1 of 3) Computing platforms and systems integration How new core systems will fit in with existing suite of applications developed around globe by different divisions Standardization: Data standards, interfaces, software, and so on Connectivity Internet does not guarantee any level of service Many firms use private networks and VPNs Low penetration of PCs, outdated infrastructures in developing countries Issues and Technical Alternatives When Developing International Information Systems (2 of 3) Software Integrating new systems with old – Version and Upgrade management Human interface design issues, languages Commonality of softwares used amongst different countries. Software localization Configuring to meet local requirements. Very important for ERP type enterprise systems ( SCM , CRM etc.) Issues and Technical Alternatives When Developing International Information Systems (3 of 3) Most important software applications: Enterprise Resource Planning Business Warehousing and MIS Electronic Data Interchange ( EDI ) Enterprise systems like CRM , SCM , SRM , PLM Collaboration tools, e-mail, videoconferencing , Chat Servers and Operating Systems IT Security systems Data Analytics and Reporting systems. REFERENCES  Management Information Systems: Managing the Digital Firm - Kenneth C. Laudon & Jane P. Laudon – Ch 15  The World is Flat : Thomas L Friedman  Enterprise Resource Planning, Rajesh Ray, Tata McGraw-Hill Management Information Systems Prof. Surojit Mookherjee VGSoM, IIT KHARAGPUR Week 12: Managing Global Organizations and Global Projects Lecture 03 : Shared Services  What is Shared Services…. Defining shared services Organizations share delivery of similar services across locations / countries to :  reduce cost,  enhance efficiency and  improve quality However, it requires careful design of the Organization’s structure , governance and IT backbone for high quality Management Information System, to ensure that it achieves the level of cooperation required to implement an effective shared services model. Seamless and real-time communication play a key role in the effectiveness of MIS for the success of the Shared Services.  Three Key things provided by Shared Services  external services — services that Organization provide to its customers such as : consulting or advisory services , non-core service activity like Catering by Railways ( IRCTC )  back office functions — functions that support the Organizations functioning such as : Information Technology, Finance, Legal, Payroll, and Human Resources , Corporate Social Responsibility , Training , R&D etc;  procurement — Centralised purchase of goods and services to achieve economies of scale , short lead time of delivery , maintaining lean inventory levels.  Major benefits of Shared Services …. C ost re d u c ti on th ro u g h e c o n o m i e s o f s c a l e I n c re a s e d eff i c i e n c y t h ro u g h s h a r i n g o f a s s et s a n d p e o p l e I m p rove d s e r v i ce d e l i ve r y a n d co n s i ste n cy a cro s s re g i o n s Re d u c e d d u p l i cat i o n o f p ro c e s s e s a n d s k i l l e d h u m a n re s o u rc e s I m p rove d q u a l i t y o f s e r v i c e t h ro u g h l a rge r a n d m o re s k i l l e d re s o u rce p o o l S ta n d a rdi z i ng t h e b u s i n e s s p ro c e s s e s a c ro s s l o cat i o n s a n d co u nt r i e s C o m m o n I T to o l s – l o we r co st s  Major benefits of Shared Services Promotes the consolidation of scarce resources with specific technology skills that can be shared across business units Engages industry standards and best practices Flexible engagement models to satisfy clients’ diverse needs Ownership and control remains with the Organization Keeps the Organization focused on core activities Support of local economies by sustaining local employment ( Outsourcing )  Shared Services – Delivery Mechanisms Resource sharing – Multi National organizations share key resources (plant, equipment or personnel) of individual countries to deliver for Group companies. Centralisation of services – relocation of multiple delivery sites or services to one centre which then serves the whole organization. These could be located at one place for world-wide operation or have locations each at continent level ( Americas , EU , Asia-Pacific etc. ) Joint venture – establish stand-alone entity to share costs and risks of providing goods or services ( e.g a separate company for procuring raw-material for the parent organization ) Outsourcing – Key functions outsourced to provider organisations. Non-core functions can be outsourced to a third-party for efficiency and cost saving and agility. All of these get delivered on a platform (back – bone ) of Integrated IT systems and technology  Scope of Shared Services in a business enterprise…….. FINANCE HR IT Planning and Benefits Hardware & Software Budgeting Administration Application Development Treasury/Cash Records Data Center Operations Management Management Standards Internal Audit Training & Technology Planning Tax Development Security Foreign Relocation Cloud Exchange Services ERP , CRM , SRM, KM etc. Business Support Recruitment enterprise softwares Analysis Payroll Scope of Shared Services in a business enterprise Customer Legal Procurement Service Call Centers Regulatory Transportation & Logistics Credit & Compliance Strategic Sourcing Collections Public Warehousing Order Affairs/Media Inventory Processing Relations Management Returns Litigation Vendor Management Processing Support & etc. etc. Coordination Insurance etc. Challenges for Shared Services functioning ….. Not having Lack of common tools Lack of Top common and Management process approaches support management Maintaining key Inconsistent Lack of a employee approach to shared center talent customer infrastructure service Functional silos Different Time Different Legal for processes Zones Requirements execution  Challenges for Shared Services functioning – Change Management  Biggest challenge is fear of reduced importance ,for the employee, when ‘business processes’ get shifted to a Shared Service Organization , which would usually be in a different country.  Consolidation of common functions in a single location would result in staff reduction  Staff relocation to different country with associated problems ( family issues etc.)  Reporting to managers from different country , different cultural background , habits etc.  Need to learn new technologies  Multiple Time Zones How Technology is helping Shared Services Electronic Cloud Social ERP Environment Media Processing ERP provides Electronic Has enabled quick Easier and the platform Invoicing , setting up , scaling effective for building Document up and scaling collaboration with operational Management , down as necessary partners without efficiency and Automated without any Capex any geographic generating payment , User involvement limitation MIS reports Self service, Workflow etc. Locational features impacting global shared service centers  Americas: The Americas region, particularly in the US, have the most established shared services models  technology, common language, standardized policies , skilled man power.  Latin America: Low cost manpower , skilled in IT and Spanish language support Locational features impacting global shared service centers  Eastern Europe:  EU process knowledge  Muti European language support  Moderately expensive labor  China:  China is in its infancy stages of developing shared services organizations  Most large manufacturing companies have a base in China  Lack of English knowledge Locational features impacting global shared service centers  India / Philippines:  Cheap labor  Strong knowledge in English  Global leaders in business process outsourcing  Large technical pool  Very good IT and Telecom Infrastructure REFERENCES  Enterprise Resource Planning, Rajesh Ray, Tata McGraw-Hill  Management Information Systems: Managing the Digital Firm - Kenneth C. Laudon & Jane P. Laudon  Shared services Analysis report by KPMG  Trends and Best Practices in global shared services – Chezey Partners Management Information Systems Prof. Surojit Mookherjee VGSoM, IIT KHARAGPUR Week 12: Managing Global Organizations and Global Projects Lecture 04 : Offshoring / Transitioning Global IT systems  Outsourcing / Offshoring of IT systems of an Organization  The world has seen since the early 90’s , major shift in policies of large corporates towards managing their IT systems.  They decided to “Outsource” both ‘support- maintenance’ as well as ‘new developments’ to specialised IT organizations , whose business is IT development and maintenance (e.g – IBM , TCS, Wipro, Infosys, HCL-Tech , Tech-Mahindra , Cognizant etc. ).  Cost – saving being a major factor , all of these service delivery organizations developed in countries like India , Philippines , Brazil which were located far away from the Headquarters of the Clients. The new locations were thus referred to as “Off-shore Development Centers”.  Off-Shoring thus became a common terminology it the IT domain.  Transition Transition – is the process of transferring the knowledge and management of the IT systems from one organization to another. Activities in Transition Cycle Typical transition activities are as follows:  Knowledge transition: This involves transferring knowledge from the implementation team to support team or from Client to new Service Provider  Project documentation transition: Different documents created during the project need to be stored properly and to be handed over by the implementation team to support team.  Human resource transition: Once the implementation is over, some people will go back to their old job, some will remain to support the application in future, new consulting company may take over the support work – planning need to be done for all these.  Transition Activities Knowledge Transfer  Client’s business process knowledge  Application Specific knowledge  Logics for configuration, developments etc Documentation Human Resource Transition  Blueprints  Location transition / Transfers  Business Logics / Design documents  Role transition / New roles  Development Specifications  Compensation and  Configuration documents  Employment conditions  Application Information Documents  Test Scripts  Typical Support Activities for Transitioning / Outsourcing ….. System Administration  Daily Database Administration  System performance monitoring  Managing Job Schedules  Managing Technical Infrastructure Change Management  Develop and Implement Change Control Procedures  Applying regular patches, notes etc  Testing while implementing changes  Transporting changes from one environment to another  Typical Support Activities for Transitioning / Outsourcing End user application support  Provide Ongoing Support to End Users  Manage and Resolve problems and issues  Root Cause Analysis of problem Knowledge Management  Deliver continuous End User Training  Evaluate learning effectiveness  Document Lessons Learned Continuous Improvement  Plan for Continuous Improvement  Value Realization  Measuring Business Benefits Transition activities manage a successful transfer of knowledge to global delivery support staff. Service Request Cutover Readiness Assessment Quality Gate/Review Type On-going Transition Guided Assisted Parallel Steady Maintenance Planning Perform Perform Perform State Maintenance Emergency Fix  Transfer of service responsibility Corrective Maintenance  perform 100% of work tasks  SLAs defined Database Services  Second stage of knowledge transfer  perform 75% of work tasks Development Application Enhancement  First stage of knowledge transfer Data Services  Work shadowing/Classroom Ed.  perform 25% of work tasks 7  Incremental Progress towards the Goal Perform SS Application Knowledge PP ASP Application Specific Planning Target application KT - Knowledge Transfer Guided Perform skill KT - Knowledge Transfer Assisted Perform Train KT-AP PP Parallel Perform SS Steady State RKT Remote Knowledge Transfer KT-GP Plan Pre ASP Plan Time Continued and effective support / maintenance of applications 8  Plan - Transition Master Planning Deliverables Network Master Transition Plan P1 Transition Partitions GDC P2 P3 Client Skills Staffing analysis Repository Server RKT Infrastructure setup RKT – Remote Knowledge Transfer – Desktop to Desktop GDC – Global delivery Center 9  Plan - Application Specific Planning Deliverables Application Specific Transition Plan Knowledge Assessment Application In flight Projects Training Plan Criteria Document Review Risks Staffing Plan AID – Application Information Document ASCP – Application Support Control Plan Application Specific Planning (ASP) is done for each logical application group to develop detailed Training Plans 10 Perform - Parallel Perform & Steady State Deliverables  Steady State Delivery Organization  Service Levels  Disaster Recovery (DR) / Business Continuity Plan (BCP)  AID / ASCP updated in steady state  Recording Repository of Knowledge Transfer Recordings AID – Application Information Document ASCP – Application Support Control Plan 11  Transition documentation…… Application Document Repository  Reporting Chain Steady State Organization  Management Functions  Contact Information  Transition Staffing, Schedule Application Specific Transition Plan  Training, Resources  Risk Management  Client/ Governance Model Steady State Governance Model  Metrics & Measurements  Escalation Procedures 12  Transition documentation Application Document Repository Application Overview Application Information Document Technical Architecture Functions, Interfaces and Modules Business Specific Training Recordings ( RKT Tool ) Detailed Application Reviews Support Tasks Training Risks and Mitigation Identification Global Delivery Center Disaster Key Resource Identification Recovery Plan Recovery & Contingency Planning Travel Ready Planning 13  eCC Remote Knowledge Transfer Tool eCollaboration Center Uses Industry standard Audio, Video & Data channels Trainers (SMEs) and Trainees (Global Resources) conduct Knowledge Transfer from eCC equipped Conference Rooms Recorded Training Sessions Training sessions are recorded in remote location (VCR recording) Replay/reuse of recorded sessions Valuable knowledge base available resources in steady state for retraining, induction of new resources into team and cross training to create backups eCollaboration Center Collaborative environment in Steady State The on-site and remote teams can collaborate for reviews, design and critical production problems ticket resolution eCC Remote Knowledge Transfer Tools enable comprehensive and reusable training in Classroom environment using video conference 14 REFERENCES  Enterprise Resource Planning, Rajesh Ray, Tata McGraw-Hill  The World is Flat: A Brief History of the Twenty-first Century ; Friedman, Thomas. Picador/Varrar, 2005. Management Information Systems Prof. Surojit Mookherjee VGSoM, IIT KHARAGPUR Week 12: Managing Global Organizations and Global Projects Lecture 05 : Globalization of Corporates in a Flat World  The Three Eras of Globalization Era Year / Dynamic Force / Key Agent of Change How brawn, how much muscle. Colonization 1492 (Columbus set by countries Globalization 1.0 sail) to 1800 ( Country ) 1800 to 2000 Breakthroughs in transportation and telecommunication costs. Globalization 2.0 Railways , ships , Steam engines ( Company ) Telegraph, Telephone, PC, Fibre Optics, WWW. Globalization 3.0 2000 to present Connectivity , softwares and Collaboration ( Individual ) Ten Forces That Flattened The World  Ten FlatteningFactors….. Berlin Wall Coming Down ( collapse of Communism ) Netscape IPO Work Flow Software Uploading Outsourcing  Ten FlatteningFactors Offshoring Supply-chaining Insourcing In-forming The Steroids Flattener # 1 1989 - Berlin Wall comes down Tipping point for free marketsocieties Moved away from central planning Empowered individuals Flattener # 2 1995 - Netscape IPO -4 years after Berners-Lee invented the Web Universal usability, accessibility and interoperability of the Web Win 95 shipped Overabundance of fiber optic capacity Communication costs plummeted Flattener # 3 Workflow Software Have Your Application Talk to My Application Collaboration Rapid development Rapid deployment Cheapest sources for coding, testing, implementation Everyone can create and maintain digital content Flattener # 4 Uploading – The Open Source Movement Self-Organizing Collaborative Communities Open source – For production – Linux Operating Systems – Geeks making business decisions Blogs Firefox Wikipedia Not controlled by corporations or Governmentt Flattener # 5 Outsourcing Y2K and India – Major outsourcing started with this Competent programmers and engineers who will deliver the same quality at a lower cost ( coas-arbitrage ) Economic imperative ( cost saving , getting large volume of skilled resources ) Outsource everything you possibly can ( and build on your core competence ) Flattener # 6 Offshoring Rather than outsource jobs :- Send the whole factory to India or China or Indonesia or Philippines or …… Not just manufacturing but also and not limited to : – Legal processing – Medical Transcription – Consulting Services – Accounting back-office Flattener # 7 Supply-chaining Wal-Mart (one of the largest organization ) JIT (Totally integrated ) IT infrastructure as a key competitive advantage Suppliers as Partners RFID ( Radio Frequency Identification ) Flattener # 8 Insourcing UPS ( one of the largest Courier service company ) Intimate collaboration 3rd-party managed logistics “They” act as part of “Your” company – Fixing Toshiba laptops – Managing delivery of Papa John’s Pizza supplies – Packaging Segrest Farms live tropical fish for delivery – Picking, inspecting, packing and delivering Nike shoes – Working with Plow and Hearth furniture suppliers to improve packaging and reduce breakage Flattener # 9 In-forming Building and deploying your personal information supply-chain Google – now 1 billion searches per day Search Engines - Soon “everything” will be searchable Wikipedia ( Knowledge sharing ) Flattener # 10 The Steroids…. “Making collaboration digital, mobile, personal, virtual” – Carly Fiorina – Computing capabilities - including speed, I/O rate and storage capacity – Instant Messaging and File sharing – BitTorrent, Kazaa – VoIP – Skype – Video Conferencing – Google Hangout , Zoom , CISCO- Telepresence – Advanced graphics – from video games – Wireless – communicate with Anyone from Anywhere The Steroids The Great Convergence We are in a convergence of three powerful, technological forces:  Low cost and powerful computing devices  Low-cost, high bandwidth network connectivity  Open standards To Summarize : We have computing everywhere and anywhere, anytime and all the time, with access to limitless amounts of information and services. Emerging Regions – BRIC Countries REFERENCES  The World is Flat: A Brief History of the Twenty-first Century ; Friedman, Thomas. Picador/Varrar, 2005.  Andi S. Boediman ; Strategic Innovation Consultant ; www.ideonomics.com