Business Information Systems Management Issues

In the process of globalization, business and information system strategies are often senior executives' major concern. The alignments of global information strategy and the new business visions are crucial to the success of global business operations. Areas in this category and the transition implication contain information systems planning, information systems organization alignment, information systems effectiveness, productivity measurement, business reengineering, competitive advantage, information quality, office automation, identification of global business opportunities, systems reliability, availability, and transferability (Lan, 2002). The following sub-sections investigate and explore these issues in details.

Information Systems Planning

A global information system is a piece of art that facilitates cross-border business operations by integrating both social and technical elements. Introducing a new global information system involves not only the hardware and software, but also the changes in job specifications, skills requirements, management, and organization structure. All these changes should not be any surprise to all parties involved in the development and implementation of the new systems. In fact, the anticipated changes related to the new systems should be documented and the business plan drawn to reflect all stages. Before the global transition process, the organization needs to develop an information systems plan to precisely state the specifications and requirements of each phase and ensure the plan matches the organization's strategic vision. As per Laudon and Laudon (2002), the information systems plan refers to: "A roadmap indicating the direction of systems development: the rationale, the current situation, the management strategy, the implementation plan, and the budget."

To develop an effective global information systems plan, the organization should first, understand the current business status in terms of the strengths and weaknesses, recognize all issues faced in the global transition process, and clearly outline short-term and long-term business strategies.

Information Systems Organization Alignment

As mentioned earlier, it is imperative for the information system function to align itself with the business processes, strategies and goals of the organization. Information systems are developed based on the requirement, behaviors and activities of all business parties who have intercommunicated with the organization's core business functions and objectives. These parties include suppliers, customers, government agencies, and even competitors. The goals and strategic visions of these business entities must be incorporated in the development of information systems. In addition, the alignment of information systems with business functions in a global organization must also take into account the organizational type or structure. Information systems organization alignment in the global organization is not just following business processes and conducting analysis and design, but it also requires understanding of abstract level of business strategic vision and cooperation with all business entities.

Information Systems Effectiveness

Developing effective global information systems requires more than an understanding of business processes and applying the latest information technology. It needs the participation of people who will be using the information systems from all areas through the entire development life cycle. These users include senior managers, operational staff, salespeople, customers, suppliers, and many other general employees. All these users should be invited to participate in different development phases in accordance with the job related processes or tasks. Thus, ascertaining the user involvement through the development phases is crucial for an effective global information system.

Productivity Measurement

An efficient and productive enterprise is built upon matured business processes. Accordingly, the measurement of productivity in the global organization should focus on benchmarking of business processes and information systems that facilitate these processes. The measurement of process maturity as set by ISO (International Organization for Standardization), and the CMM (Capability Maturity Model) can be used as software quality measurement. ISO 9000:2000 standard is the latest version of quality assurance system. It concerns quality systems that are assessed by outside auditors, and it applies to many kinds of production and manufacturing organizations. It covers documentation, design, development, production, testing, installation, servicing, and many other general business processes.

The Capability Maturity Model is developed by the SEI (Software Engineering Institute of Carnegie Mellon University). It is a model of five levels of organizational maturity that determine effectiveness in delivering quality information system software.

Business Reengineering

As organizations pursue globalization, changes are foreseeable in four areas:

1. Fundamental organization structure

2. Business processes

3. Management concepts

4. People and skills

Of the previous four, changes in business processes are tightly coupled with the design of global information systems. Organizations must understand and recognize that business processes in global context are significantly different from the traditional or existing ones. In order to design the appropriate information systems to facilitate business operations in global environment, organizations should rethink and redesign the business processes to align with the global business strategic vision, in accordance with Hammer and Stanton's (1995) "official definition" of reengineering which is "the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in performance."

Four key words (fundamental, radical, dramatic, and processes) contained in the definition are identified to further explore its significance in globalization perspective.

1. Fundamental - in preparing for business process reengineering, organizations must ask themselves questions in relation to the current and future business operations and strategic vision. These questions can be as simple as "What are the current business processes?" "What are the new business processes that would emerge after the global transition?" and "What are the activities involved in the processes (both current and future)?" and so forth. By asking these questions, organizations are forced to map an overall picture of ways they are expecting to conduct their global businesses.

2. Radical - refers to the design of business process from its roots. Which means not redesigning the business processes by just making modifications or improvements to the existing ones. Instead, the key concept of reengineering is to remove the old ones and rebuild the new processes to cope with the global operations.

3. Dramatic - refers to the deepness of changes to the existing business processes. Dramatic improvement differs from the marginal improvement as the former requires giving up the old ones and replacing with something totally new, while the later requires only fine-tuning of the existing processes.

4. Processes - are the objects of the reengineering concept. A business process refers to a collection of activities that carry out operations to achieve business routines and satisfy customer requirements. In a global business environment, many business processes are accomplished through collaborative teams across borders. Hence, the view of transborder business processes is crucial to successful in the business reengineering process for global organizations.

In addition to Hammer and Champy's reengineering, Bill Gates (1999) has introduced the concept of a digital nervous system as the basis of business communication network to facilitate the transformation or reengineering of business processes into new digital business processes.

Most of the business enterprises focus on a few essential elements such as customer, supplier, product and services, costs, employees, and skills. Each of these areas contains a collection of business data. Through human intelligence, the data is interpreted and transformed into meaningful information to assist people in all levels for making decisions. However, if the interpretation and transformation are performed significantly by the use of information technology, then the organization has a digital nervous system. Gates describes digital nervous system as, "the digital processes that closely link every aspect of a company's thoughts and actions.…The immediate availability of accurate information changes strategic thinking from a separate, stand-alone activity to an ongoing process integrated with regular business activities."

In thinking of business reengineering, Gates suggests organizations to consider three imperative concepts. At first, organizations should review their current business processes periodically; secondly, they should try to have the least number of people involved in the decision making of each business process; and thirdly, they should consolidate procedures and activities to decrease the failure rates.

Multinational corporations often find that some similar or even identical processes are implemented in various transborder business units. This would result in the duplication of jobs, inappropriate allocation of human resources, and the ambiguous global management responsibilities. Although creating a new business process or reengineering an existing one is a complex and sophisticate project in a global business organization, the process owners in all transborder business units should define a unique global process that would be adopted throughout the organization. Furthermore, the globalized business processes streamline the transition in outsourcing situation.

Competitive Advantage

Attaining global competitive advantage, organizations require competence in changes in areas such as organizational structure, skills, and resources. These competences are crucial to attaining competitive advantage, but perhaps even more importantly, making sure the competitive advantage is always through a value-added product or service to the customer. Ford Motor Company is a good example to illustrate how the changes have taken place (Leontiades, 2001). In order to reach the global competitive advantage, Ford transformed its organizational structure through five stages of changes in its competence.

In the first stage, competence of overseas business unit was based on products, designs and methods provided by home country (the headquarters). In Stage 2, competence of the overseas business unit was based on its own production with the designs and methods provided by the home country. When the overseas business unit had the capability of production and designing products locally, then it had reached the third stage. In the fourth and fifth stages, the capability of production and designing were based in regional and global respectively. In accordance with the above stages, the competence of changes became the key driver for the organization towards globalization, while customer requirement became the trigger of transformation from stage to stage. Furthermore, to maintain the global competitive edge, the organization needs to ensure the reorganization of the organizational structure and its business strategy have met the customer satisfaction in the global transformation process.

Besides the changes in competence, Porter (1998) also introduced the diamond theory of competitive advantage. The diamond constitutes four attributes that determine the environment, the inputs of production, the availability of resources, the requirement of necessary skills, the business strategy, and structure of the organization. These attributes are labeled as factor conditions, demand conditions, related and supporting industries, and firm strategy, structure and rivalry. Using the diamond of competitive advantage concept in the globalization context (see Figure 4), the determinants of four aspects of the competitive advantage can be defined as follows.

Figure 4: Diamond of competitive advantage in the global organization

1. Factor conditions - factors of production are the fundamental input to competition. The advantage arises from the high quality inputs such as global market and products knowledge, diverse acquisition of technology and infrastructure and variety of human and capital resources.

2. Demand conditions - advantages arises from the characteristic of global market and products. In a global market, customers demand products from anywhere in the world. Redesigning of products or services is essential to fulfill the global conditions and satisfy the global customer requirement. Thus, the global products can be manufactured anywhere and distributed to the nearest market.

3. Related and supporting industries - advantages in increasing productivity arises from the availability of global resources (specialized suppliers and related industry). Through the global supplier channel, organizations are able to find required supporting materials and services with at reduced costs. The presence of global resources even works better with the global production strategy. That is, the selected global suppliers provide the required materials or services directly to the closest global production sites. It results in the reduction of time required for transportation and thus shortens the production cycle.

4. Firm strategy, structure, and rivalry - the diverse and multicultural conditions in the global business environment present advantages to enterprises in organizing, structuring, and managing the business strategy and structures to survive in the global rivalry.

Information Quality

Information is a direct product of processes that capture knowledge about the persons, places, things and events discovered while conducting business transactions (English, 2001). In a global organization, the sources of information are enormous. Information is virtually produced by everyone from any level in the organization. As a result enterprises are often facing the situation such as missing or inaccurate information. These would cause business processes to fail and increase costs in reproducing of information. Hence, organizations must apply quality principles to effectively manage information. However, managing and controlling information and its quality seem to be a complex and challenging task. Clikeman (1999) defines a number of dimensions that are critical to maintaining the information quality in the global organization; they are relevance, accuracy, timeliness, completeness, coherence, format, accessibility, compatibility, security, and validity.

Office Automation

Office automation involves the planned application of integrated information handling tools and methods to improve the productivity of people in office operations. Although managing information by office people is the focus of office automation, other aspects of the office are also affected. These include factors such as the structure of business functions and lines of reporting, training for new methods, work space design, locations of subsidiaries or business units, home versus office work, hours of work, employee morale, and job classifications. Organizations that harness office automation products will need to deal with many more than just technological issues.

Three major roles of an office identified by Laudon and Laudon (2002)are:

1. Coordinate and manage the work of local professional and information workers within the organization.

2. Link the work being performed across all levels and functions throughout the organization.

3. Couple the organization with the external environment.

Generally, there are five major office activities can be identified including managing documents, scheduling individuals and groups, communicating with individuals and groups, managing data on individuals and groups, and managing projects. The computing and information technologies that support each activity should be identified and made available for all business units in planning for globalization.

1. Managing documents - it involves tasks such as creation, storage, retrieval, and dissemination. The technologies supporting these tasks include word processing, desktop publishing, document imaging, Web publishing, and work flow managers applications.

2. Scheduling individuals and groups - the technologies facilitate this activity include electronic calendars, groupware, and intranet.

3. Communicating with individuals and groups - the tasks include initiating, receiving, and managing data in the format of voice, image, digital, and text. The supporting technologies may consist of e-mail, voice mail, digital answering systems, groupware, and intranets.

4. Managing data on individuals and groups - this activity mainly focuses on the management of data and information of employees, customers, vendors, suppliers, or even competitors. The enabling technologies include database systems and spreadsheet applications.

5. Managing projects - it refers to the management of collaborative work and projects in both local and global environments. The technologies that can be applied to this activity may include groupware, teamware, and project management applications.

Identification of Global Business Opportunities

With rapidly advancing technology, the business and information technology community are encouraged to consider many more innovative business models. These emerging innovative business models can be defined in a number forms such as mergers and alliances, differentiation of products and services, e-business (electronic business), economic value added focus, productivity process, order fulfillment and customer demand management, and globalization of markets.

1. Mergers and alliances - these refer to the need for individual organizations to increase in size either by internal growth or by alliances with external parties (other organizations).

2. Differentiation of products and services - refer to the need to provide products and services to customers that are, at the same time, unique, value efficient, and reasonably priced.

3. E-business - refers to development, acceptance, and usage of the Internet business tools in overall or partial company operations (such as virtual organization), sourcing and supply strategies.

4. Economic value-added focus- refers to the increasing financial pressure on organizations to achieve high process performance as they affect or are affected by sourcing and supply, and increasing focus on economic value-added.

5. Productivity process - refers to the growing emphasis by top management on cost control, reduced cycle time, increasing flexibility, and the profit picture and process economics.

6. Order fulfillment and customer demand management - refers to the fundamental changes in distribution, and the need to change the methods used in customer order fulfillment and customer demand management.

7. Globalization of markets - refers to the need to adopt standard processes for producing, selling and distributing products and services.

Systems Reliability, Availability, and Transferability

Information systems should be reliable in terms of withstanding the use by various types of users through a variety of platforms or environments. This refers to the capability of incorporating diverse error handling strategy to react any possible and unforeseeable situations in information systems. Moreover, the availability and transferability of information systems are considered as important as the systems reliability in the global organization. Due to the multinational business units in the global organization, each business unit may need to access the information in different periods. The maintenance strategy needs to cope with this multinational characteristic to eliminate the consequences of the systems downtime. If the implementation of global information systems is through the Internet, users expect the systems to operate in a 24/7 manner. The components and modules of global information systems should also be designed flexible enough to transfer and adapt from one business unit to another without further technical modifications. This portable and transferable concept should be built into the development architecture to enhance the reusability and to reduce the development and maintenance costs.