Page 548 - Using MIS

516 tHe InternatIonal DIMenSIon International MIS

The third complication for operations is outsourcing. Many organizations have chosen to
outsource customer support, training, logistics, and other backroom activities. International
outsourcing is particularly advantageous for customer support and other functions that must
be operational 24/7. Many companies outsource logistics to UPS because doing so offers com-
prehensive, worldwide shipping and logistical support. The organization’s information systems
usually need to be integrated with outsource vendors’ information systems, and this may need
to be done for different systems, all over the world.
The fourth IS department responsibility is protecting IS and IT infrastructure. We consider
that function next.
Setting Up Information Systems in Foreign Offices

To illustrate the challenges of international IS management, suppose that AllRoad Parts decides to
open an office in Europe. How might it go about developing information systems for that office?
Before answering that question, consider the experience of Thomas Keidel, chairman of the
Mahr Group, a midsized, multinational firm headquartered in Germany:
For all of our foreign offices, we obtain hardware and networking equipment from the local economy.
Once we have purchased or leased a facility, local vendors supply and set up hardware, a local area
network, and access to the Internet in accordance with our specifications. Then, we bring in our own
IT professionals from Germany to install software. As much as possible, we use the same software
worldwide. We use the same accounting software and chart of accounts, and we use the same busi-
ness processes, worldwide. Twice a year we conduct internal audits to verify compliance.
One difference we do allow, however, is to conduct transactions in local currency. We assume
the risk of currency fluctuations at headquarters, and if there is any currency hedging to do, we do it
at headquarters. We want our foreign offices focused on sales and manufacturing and not on currency
valuation opportunities and risks. 11
Because it is a manufacturer, Mahr operates an ERP system, for which it maintains a central-
ized database in Germany that is accessed via its own leased communication lines worldwide.
It also requires that the same computer-assisted-design (CAD) software be used worldwide. As
Keidel notes, “That way we can exchange designs among all of our facilities without problems.”

Active Review

Use this Active Review to verify that you understand the ideas competitive forces. Explain how the global economy changes
and concepts that answer the study questions. the way organizations assess industry structure. How does the
global economy change competitive strategy? How do global
Q1 How does the global economy affect information systems benefit the value chain? Using Figure 3-6
organizations and processes? (page 89) as a guide, explain how each primary value chain ac-
tivity can be performed anywhere in the world.
Describe how the global economy has changed since the mid-
20th century. Explain how the dot-com bust influenced the Q2 What are the characteristics of
global economy and changed the number of workers world- international IS components?
wide. Summarize why the idea that the world is flat gained
momentum and why that notion is incorrect. State how the lack Explain how internationalization affects the five components
of a “flat” world presents business opportunities. Summarize of an IS. What does it mean to localize software? Summarize
the ways in which today’s global economy influences the five the work required to localize a computer program. In your own

11 Private correspondence with the author, August 2011.