Challenges of Information Systems

Multinational Organizations
Increasing number of corporations becoming multinational Global information system: serves organizations in multiple countries
Used by multinational corporations

Overseas operations must abide by local laws

The Web and International Commerce

Web became important vehicle for B2B and B2C commerce Ratio of non-English speakers to English speakers growing Internet opens enormous global opportunities Chinese market expected to be largest in future Web offers opportunities to save on costs

The Web and International Commerce (continued)

Manuals prepared with animation/ Videos Presented in many languages Global businesses must be sensitive to audiences Glocalization: design global sites to cater to local needs McDonalds menu changes to appeal to local palates

The Web and International Commerce (continued)

Plan Plan the site before you develop it Learn the preferences Translate appropriately Be democratic Avoid cultural Imperialism

Think Globally, Act Locally

Businesses that cater to international audiences must glocalize their Web sites

Think Globally, Act Locally

International companies think globally, act locally Be sensitive to regional customs Control must be decentralized Strategic planning should be global Can be followed with local flavor

What are the challenges for IS in the global arena?

Global information systems face challenges
Technological barriers Regulations and tariffs Electronic payment mechanisms Different language and culture Economic and political considerations Different measurement standards Legal barriers Different time zones

Technological Challenges
Challenges Not all countries have adequate information technology infrastructures Unable to build international IS Broadband communication lines needed Solutions Can offer two versions of Websites to compensate for slower bandwidth

Technological Challenges
Challenges Language is technological challenge because eight-bit bytes not sufficient for languages with large character sets (e.g., Chinese, Korean, Japanese) Fields such as telephone numbers present problems for databases in MNFs Solutions Use double-byte characters (e.g., unicode allows for 65,536 characters) Fields for telephone numbers must be variable length to allow flexibility

Regulations and Tariffs

Challenges Countries have different importing regulations Executives reluctant because of hassles Even with research there are fears that employees will not know how to comply with laws of destination countries Solutions There are programs such as NextLinx to help importers and exporters for Web commerce NextLinx is integrated within the firms systems When an international order is placed the software determines tariffs, cost of delivery, provides forms, and logistics It builds its applications around a comprehensive database of international trade regulations that helps determine the most efficient way of getting shipments from one country to another. Its software also calculates tariffs and automates licensing and compliance paperwork.
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Differences in Payment Mechanisms

Challenges E-commerce allows easy payment for online purchases Credit cards preferred payment method in North America Not all countries adopt this preference Japanese avoid using credit cards Solutions Web sites for international firms must have multiple payment mechanisms Konbini example in Japan

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Language Differences
Challenges International parties must agree on common language Data not transmittable internationally because information must be translated computers still cannot accurately translate on the fly English considered de facto international language Solutions Largest companies translate Web sites into local languages Web site design and translation should be done in overseas offices although the server may be located in another country; lack of uniformity in languages Multiple accounting systems in different languages

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Cultural Differences
Challenges Different countries vary
Tastes Gestures Treatment of people Ethical issues

Conservative groups against Americanization Solutions

MNFs should employ local personnel to design their Web sites or version of a Web site that will appeal to a particular country

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Cultural Differences (continued)

Some nations are afraid that cross-border information flow promotes cultural imperialism
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Conflicting Economic, Scientific, and Security Interests

Challenges Goal of corporate management Seize large market share and maximize organization profits Goal of governments is to protect economic, scientific, and security interests of its people Occasionally interests conflict Drawings related to the design and manufacture of weapons Software packages Encryption software Differences in treatment of trade secrets, patents, and copyright law Solutions No easy ones Pressure from America for stronger copyright laws International trade groups

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Conflicting Economic, Scientific, and Security Interests (continued)

Weapons manufacturers have technical drawings
Valuable to both company and security of country Governments may not allow exchange of weapon designs

PGP encryption application was opposed by government

Thought to compromise national security
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Conflicting Economic, Scientific, and Security Interests (continued)

The U.S. government controls the export of encryption software

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Political Challenges
Challenge
Information is power and some countries oppose policy of free access to information and limit use of Internet Governments recognize that software is an economic resource and require firms to purchase local software to build local industry; problems for firms trying to standardize

Solutions
MNFs may have to cut some content from their sites to limit risks of offending local government Limit use of employee blogs International human rights pressure may help in the long run

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Different Standards
Standards considered when integrating ISs internationally Records may be incompatible United States uses English system of weights and measures Rest of world uses metric system

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Different Standards (continued)

Different standards
Communicating dates Times Temperatures Addresses

United States uses month/day/year format Rest of world uses day/month/year

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Different Standards (continued)

Differences in standards pose a challenge to companies that wish to integrate their information systems across national borders

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Different Standards (continued)

Different standards very costly
NASA lost spacecraft because of measurement unit discrepancy

European Article Number (EAN): barcode that includes an extra number to identify country Universal Product Code (UPC): American standard without last extra number Uniform Code Council (UCC): promoted use of European standard

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Different Standards (continued)

Companies must adapt ISs to de facto (formal) standards Support global supply chains Major push for using RFID tags

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Legal Barriers
Countries have different laws
Affects global business in general Poses challenges
International transfer of data Free speech Location of legal proceedings

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Legal Barriers (continued)

Privacy laws
Respect for privacy in international business is unresolved challenge Majority of democratic nations protect individual privacy Laws reflect difference in approach to issue of privacy

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Legal Barriers (continued)

Data protection laws described by three criteria
Apply to private or public sector Manual or automated data Concern human beings or legal entities

US privacy laws
Both public and private Mostly encompass manual and computerized systems
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Legal Barriers (continued)

European Union practices may conflict with U.S. practices
Personal data collected only for specified purposes Personal data must be given consent to be processed Collecting organizations must identify themselves People have right to object to processing of personal data
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Legal Barriers (continued)

Challenge American companies collect data for marketing purposes on all their customers, but differences between European and American approaches prevent unrestricted flow of information with respect to data collection on EU customers For example, EU agents monitor US companies that collect data on EU citizens Solution The EU has worked with the US Dept of Commerce to enable US companies who comply with EUs Directive on Data Privacy to carry on trade without fear of violating the directive (Safe Harbor arrangement)
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Legal Barriers (continued)

Challenge Suppose you purchased an item from a site located in another country, and the item has a defect or arrived after the time promised. Because your request for compensation or other remedies has not been answered, you decide to sue. Where do you file the lawsuit? Solution Country- of-origin principle whereby all legal matters are confined to the country where the site operates Country-of-destination principle whereby the laws of the country to which the site caters apply regarding dealings with the site, regardless of the sites country (EUs approach)

Legal Barriers (continued)

Applicable law
Free speech laws different in other countries Impacts what can or cannot be displayed online

Other laws
Gambling Auctioning Sale of alcohol and drugs

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Different Time Zones

Different global regions require policies for work and information systems Teleconferencing available most of day Sometimes 24 hours per day Allow employees from different time zones to discuss problems Teams in support centers may work shifts

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Different Time Zones (continued)

Different time zones must be considered by all organizations that do business in multiple countries
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Different Time Zones (continued

Challenge MNFs must craft policies that work for employees, customers, and IS for all time zones Time stamping Solutions Teleconferencing systems can help; but huge time differences require accommodations for employees in other time zones Chat rooms and bulletin boards for asynchronous communication Opportunity to work on projects 24 hours a day Enable customer support personnel to be available 24/7 without requiring night shift work Standard policy for time stamping documents

Different Time Zones (continued)

Managers must be aware of incorrect time stamping Systems at both locations can be designed to record local times of both locations Or record single time (company headquarters)

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Summary
Companies using Web for business must accommodate non-English speaking audiences Companies must tailor to local preferences Must be aware of cultural differences and payment preferences Tariff and legal issues Linguistic, cultural, economic, and political challenges must be addressed
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Summary (continued)
Laws governing collection of data in United States and European Union are different Incompatible data privacy laws Restricted flow of personal data between United States and EU Safe Harbor arrangement enables EU to do business with US

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