Chapter 15 - Managing Global Systems

Some of the major factors that drive the internationalization of business are the growth of inexpensive international communication and transportation.  They have developed a world of cultured world with stable expectations or norms. Political stability and a growing global knowledge base that is widely shared also contribute to the world culture. Global markets, global production, coordination, distribution, and global economies of scale are the general factors that create the conditions. 

The alternative factors for developing global business are multinational, franchiser, domestic exporter and transnational.  Multinationals typically rely on decentralized independence among foreign units with some movement toward development of networks.  Franchisers typically duplicate systems across many countries and use centralized financial controls.  Usually domestic exporters are centralized in domestic headquarters with some decentralized operations permitted.  Transnational firms have to permit considerable decentralization of development and develop networked system configurations.

Global information systems create challenges because political, cultural and language diversity greatly increases the differences in business processes and organizational culture  and encourages growth of disparate local information systems that are hard to implement.  The solution to the problem is to define a small subset of core business processes and concentrate on creating systems to support these processes.  Managers will have to intentionally cooperate widely dispersed foreign units to act in the development and operation of these systems, being cautious to maintain total control.  

Integrating a global system mandates an implementation strategy that considers both technology platforms and business design. The biggest telecommunications and hardware problems are connectivity and systems integration.  Going with either a proprietary architecture or with open systems technology are the choices for integration.  Global networks can be very complicated to operate and build.  A company has a choice of either building their own global network or developing global networks based on the Internet.  Building interfaces to existing systems and finding applications that work with various organizational frameworks, cultural and language are the main issues concerning building interfaces.

Chapter 14 - Managing Projects

Project management activities include assessing the risk, planning the work, acquiring resources required to accomplish the task, estimating, organizing the work, directing execution and analyzing the results.  Project management must also deal with  major variables: scope, cost, quality, time and risk.  Excelling in project management is crucial for ensuring the logistics of managing systems are carried out timely and efficiently.

It is crucial that organizations have an information systems plan that explains how information technology supports the attainment of their business documents and goals all their system applications and IT infrastructure components.  Most large companies have a management structure that ensures that the important systems receive priority.  Some of the methods that can be used to select and evaluate are portfolio analysis, critical success factor and scoring models.

A company can assess the value of information systems projects by calculating its costs and benefits.  Intangible benefits cannot be immediately quantified and tangible benefits are quantifiable.  Any benefit that exceed costs should be analyzed using capital budgeting methods to ensure a project has a good return on invested capital.

The principal risk factors in information systems projects are determined by project size, project structure and experience with technology.  Whenever there is a lack of user participation, lack of management support and poor management of the implementation of the project; the chances of failure are increased. Projects that involve business process re engineering, mergers and acquisitions and enterprise applications have the highest failure rate, because they require the largest amount of organizational change.


Some strategies useful for managing project risk and system implementation are implementation, user support and involvement, control of the implementation process and mechanisms for dealing with the level of risk in each new systems project.  The contingency approach to project management can help control the situation better than most other means of doing so.  The risk level of each project is what determines the appropriate mix of external and internal integration tools, formal planning tools and formal control tools that are applied.

Chapter 13 - Building Information Systems

Building new systems produces organizational change because the act itself is a form of planned organizational change.  There are four kinds of technology enabled change, automation, rationalization of procedures, business process redesign and paradigm shift.  Currently many firms use business process management to redesign work flows in order to create dramatic changes in productivity.  Companies also use business process management to aid in six sigma, total quality management and promotion.

Systems analysis and design, conversion, testing, maintenance and production are all core activities within systems development.  Systems analysis is the study and analysis of existing systems and the identification of requirements for their solutions.  Systems designs shows how technical and organizational components fit together; as well as provide the specification for information system solution.

Structured methodology and object-oriented development models are the two principal methodologies for designing and modeling systems.  Structured methodology consists of the data flow diagram, which is the main tool for structured analysis, and the structure chart which is used for representing structured software design.  Object-oriented development systems display a collection of objects that combine processes and data; and is based on inheritance and class.

There are many alternative methods for building information systems.  The oldest method is the systems life cycle which requires that information systems be developed in stages.  Prototyping is another method and it includes building an experimental system quickly and at a low cost for end-users to evaluate and interact with.  Another method is using a software package, this method is convenient because it reduces the amount of design, programming, installation, testing and maintenance needed to build a system.  End user development is the development of information systems by the end user, they can be created informally and in a short amount of time.  The last alternative method the chapter focused on was outsourcing.  It includes using external vendor to operate or build a companies information system instead of using the companies internal information systems staff.

There are some new, more modern approaches to system building.  Many firms have starting using joint application design (JAD), rapid application design (RAD), reusable software components and agile development.  RAD uses object-oriented software, visual programming, fourth generation tools and prototyping.  Agile development breaks a large project into a set of smaller ones.  Component based software increases the speed of application development by combining objects into suites of software used to create business applications.