Table of Contents
- Formulation of Strategy in Information System
- Benefits of Information Systems Strategy
- The information system within the multinational corporation
- Multinational informational systems
- International information systems
- Global information systems
- International IS Issues
- Intra-corporate IS Issues
- Intergovernmental IS issues
- Host governmental IS issues
- Reactive international IS issues
- Related Management essays
Information system strategy can be defined as a general plan of action targeted at producing a general strategic information systems design, which meet the business objectives, encompasses information technology and aligns with the general business strategy. Information system is way of looking at a business, which is systematic as well as independent of the technology, and it entails manual systems thus prompting the whole business to be seen as a business process that includes people aspect like training as well as the organizational aspects and business resources management for instance cash flow (Laudon & Laudon, 1988).
Every multinational company must have a business strategy which is a long term plan which show the direction that the business is taking and it therefore provides the agreed upon set of objectives for the targeted business. In order to formulate such business strategy a SWOT analysis i.e. strengths, weaknesses, opportunities as well as the threats may as well be carried out to help in identification of the internal and the external factors that has an impact as it pertains to the business of the multinational company. Threats includes competitors who often comes up with better products or even over reliance on particular supplier, therefore the information technology can serve to improve a multinational company thus helping in preventing competitors from stealing the company's products ideas. In addition to that, a business strategy may also include the plans targeting few products as well as new markets and this might be subject to involvement to selling of the business or even buying of other businesses.
Business is taking account of the targeted business interests. Information technology consulting is also referred to as the information technology consulting company consultancy, technology-consulting business, computing consultancy or even a technology services to information technology advisory, which is focuses on advising businesses. One the best ways of using information technology is to help organizations to meet their businesses objective. In addition to their services of providing business advice, these information technology consultants also lend a helping hand as it pertains to implementing, deploying as well as administration of information systems on the targeted companies on behalf of the company also regarded as outsourcing.
Formulation of Strategy in Information System
Information systems strategy constitutes one part of business strategies and it therefore inevitably requires a change in the working practices with in the targeted multi national corporation. In addition to that, formulation of such strategy requires that the information technology is connected and that includes the process of introduction as well as the use of the information technology resources for the benefits of the whole company. Formulation of such strategy plans a critical role in identification of the information needs of the company and therefore must be led by the needs of the company and not by the availability of the technology (Laudon, et al 1988). Based on research on the subject matter some of the main factors that serve to contribute to the success of any information technology strategy are basically a commitment from the senior members of the management as well as adequate resources and sufficient training opportunities (Galliers, et al, 2006).
Another term associated with information system strategy in an multinational company is the end user computing which basically implies to the people who extracts in formation from the management information system and in traditional context computer professionals present within the organization or the company usually develop computer systems as well as serve in controlling the outputs as opposed to nowadays where the end users have got more involved through the access to the company's productivity applications which they can utilize them to develop their own systems for instance a business manager may as well create spreadsheets and use it to work out some forecast. As it pertains to the end user computing the monopolist approach is meant to strictly control the end user development where as the laissez -faire' approach is targeted at encouraging the end user systems development to expand.
Some of the advantages attached to the monopolist approach include the following: first is that it serves to ensuring that the entire organization or company is utilizing a common system thus preventing the incompatibility issue, data files as well as the staff can easily access between the various organizational departments. In addition to that it also serve to ensure that systems are employed by the experts who then plays a critical role in producing efficient systems that have proper documentation and finally the monopolist approach also allows the control of data as well as help in reducing the threat to the data security. On the other hand, the Laisssez-Faire approach has several advantages that include the following: the needs of the end users can therefore be met without having to wait for sometime in order to become available. Also the organization can easily unleash the creativity or talent of its workforces and final advantage of this approach is that the end users gets the system of choice especially if they are the ones who plays the critical role of developing them (Galliers, et al, 2006)
The interdependence of the organizational structure, organizational strategy and the information systems is widely accepted and even proposal of a link that exist between an organization set strategies and the management information systems strategy presently identified as business strategy and information technology strategy. Several strategic thrusts have been identified that links the firms organizations use of information technology and the business strategy and they include: cost, innovation, differentiation alliance and growth and for each thrust their similar targets are set including: competition, suppliers and customer and this approach intends at seeing ways in which IT affects the thrust market matrix. The information strategy of the organization is aligned with the needs of the organization and its means and that delivery of this strategy is based on a good governance, projects and service management coupled with high quality, sustainable and reliable information technology services.
A corporate plan of an organization has an information system strategy which is concerned with the planning, introduction as well as the use if information technology resources for the benefit of the entire organization and this strategy are closely linked with other strategies. There exists several factors that serve to influence this IT strategy and they include management organization and functions, the existing planning and decision making methods, general organization structure, the responsibility for the information systems with in an organization, hardware and software, standards, behavioural factors and finally the efficiency of the information flows in the organization. The first factor is the management organization and functions and this involves the organization and implementation which basically translates to getting things done and thus decision from higher in the organization get implemented by the managers and therefore tasks are organized in such a way that its possible to be archived. Strategic planning involves the direction of the firm or the organization where as the tactical planning covers the short term and the medium organizational objectives to be attained. Also the process of reviewing and controlling involves the managers of specific departments of the organization who look at the performance and this helps in ensuring that the targets are being achieved (Galliers, et al, 2006).
Another influencing factor in the organization IT strategy is the responsibility for the conformation systems with in the organization and this is done by the It department and its best done through out the firm as opposed to management of individual responsibility areas. In addition to that a networked centrally data forms the most efficient system and this is attributed to the fact that individual managers in the organization set up their own system with in the firm and in doing so may compromise data security as well as the data protection act by probably duplicating much of the data held centrally consequentially making the system inefficient.
Organization structure also influences the It strategy in that hierarchical structure that is applied in most organizations ensures that communication of data moves up and down the different levels. Many organizations use the existing software and hardware and adapts to changes, which is very necessary meaning that new developments on the organization for instance new MIS system and existing data processing system. Several behavioural actors also affect the organizations It strategy in that staff attitude as well as cooperation pertaining necessary changes in the organization especially the senior mangers plays a critical role. In addition, staff motivation for the organizations new system must be good enough and the factor will be how good the 'man management' of the individual managers is. In addition to that, cooperation between managers of the different departments of the organization is very essential in the IT strategy and this because not a single department gets a system that is good only for them and poor for the rest of the organization.
Several factors also affects an effective flow of information and data of an organization and they include the following: organization structure like the staff levels, geographical structure for instance branches and network, the processing cycle in terms of weekly report, the volume of the data being collected and input into the system and enlists the seasonal, weekend increase that serve to affect the flow, validity of data i.e. checks and collection of correct data, the report timing cycle either in term or periodically. Other factors affecting the flow of information ion the organization thus affecting the IT strategy is the report distribution cycle for instance to seniors first and time delay, the compatibility of the software being used across the various organization departments, data collection as well as input of data which can be input or auto entry, review of information flow through use of interview, questionnaires, inspection, tracking or examination and final factor is the formal or informal request which can be auto or requested (Galliers, et al, 2006).
Information flow is very essential when it comes to organization IT strategy and it this because information is very vital fro managers especial as it pertains to running of the business as well as making of decisions. In addition to that information, has to be communicated which should be done verbally in writing or even electronically by the use of information technology? Advantages of using It is that it leads too an increased speed as well as accuracy of the communicated information. Internal information transfer entails the communication with in an organization and it can be affected by the organizational structure therefore it's very essential all the staff at whatever level is able to access and make use of the right information to help them perform their own task.
Information in organization normally travels up or down one level at any given time and the nature of the data affects the information flow, written, verbal or electronically and also such information may be released at regular intervals for formal to regular decision and many of such decisions are often made using and informal request of information of the events that requires swift action.
A final factor that affects information flow is the organization personal where the level of staff in any given organization may be classified into three different types and the first type is based on strategic functions which include senor managers and the organizations directors who mainly set the overall objectives of the organization. Second type is the implementation functions which include the juniors and the middle managers who particularly are involved in the implementation of the objectives that are set by the senior managers and the directors in the organization. Final type is the operation function which day to day business activities of the organisation often involves this and the majority of staff work on these tasks.
Benefits of Information Systems Strategy
Some of the general benefits of information systems strategy are that it allows the business to increase profits by resolving the complexity by looking at the bigger picture downwards and outwards from an integrated perspective, systematic way with information technology as an integrated part of the business as opposed to isolated data islands. It therefore reduces confusion and stress while at same time increasing understanding of IT and the business resulting to more effective targeting of resources as well as efficient utilization. This result to a balancing of effectiveness and efficiency allowing priorities to be set right thus approval of projects with more confidence. In addition to that, training and communication is made easier as well as help in future prediction in term of business sustainability. Therefore information system need to be changed continuously to makes sure that it adapts to a changing environment as we as capitalize on better ideas and the best approach to achieving this strategy should be based on the life cycle of creation, operation, modification and finally disposal.
The information system within the multinational corporation
Most of the MNCs have come up with different approaches for there are functions. Some prefers centralized while other offers decentralized while some of them are distributed. Some of Multinational Corporation integrates while others do not. International information system has different classification that can be categorized as follows.
Multinational informational systems
The model that is one of the most essential prevalent models is characterized by autonomous data processing centers in each nation state where MNC operates. However, this approach suffers from problems of duplication and redundancy in data operations and applications (Galliers, et al, 2006).
Nevertheless, it is the easiest solution that is available to the MNC depending with conditions of national markets. This includes regulations, language problems, and facilities problems among others that encourage the autonomy of the business operations in every country.
International information systems
This model is characterized by the computer network that functions in more than one nation-state and in data cross international borders in the process of the completing a transaction. This model is increasingly based on the internet as its medium of data.
Global information systems
This new model is fundamental characterized by the integration of data. Sustenance for manufacturing operations that must manage inputs and outputs of plants located in different countries on the real-time basis has been one of the numerous driving forces leading to the establishment of such systems. Another force has been to wish to present a reliable face to customer that may have deals with MNC in several countries in which it operates. However, only the recent advances in distributed database management and communication technologies have made this model a viable alternatively.
The categories that are shown above of the IS follows the strategies of the host country focus, international and global. Matching of the IS and the strategies of the MNCs is because the processing of the information along with the IS design of the MNCs varies. Decentralization of the MNCs pursues independent IT operations in each country while global or centralized firm on the other hand creates its IT configuration in a manner that is centralized (Galliers, et al, 2006).
International IS Issues
It is an important mechanism that facilitate, promote and sustain international business, according to King and Sethi, international IS issues have been categorized into intra-corporate, intergovernmental, host government and reactive international IS issues.
Intra-corporate IS Issues
This offers interaction through its intra-corporate interface between the corporate unit, and its IS functions, and the overseas subsidiary and its IS functions. Therefore, this is categorized into two Information System issues. The first one is the one that is pertaining to the IS function only while the second pertains the role of the IS in supporting the competitive strategy.
The issue that pertain IS function only come from the design of the linkage between the IS function at the corporate unit and the IS function in the subsidiaries that are in the oversea. These linkages are categorized in three types.
The first linkage is the organizational linkage that ensures that there is design that addresses the organizational structure of the S at the subsidiary level. It also addresses its control systems and reporting procedures and in the participation of the IS function of the corporation as a whole (Galliers, et al, 2006). Both the variables of the company level and the subsidiaries specific variables must be considered in designing the organizational linkage. The company level variables include the overall organizational structures and organizational strategy. Subsidiaries specific variables involves the dependency of the information towards the subsidiary, its importance in relation to the knowledge contribution and its ownership
The second one is architectural linkage design. This must ensure that it address the issue of data integration, communication integration hardware and software platforms as well as application portfolio. The main question that appears in this is what is the desired level of connectivity? What is the required level of standardization of codes and ethical classification? What are the reliable level of redundancy in the databases, the desired degree of freedom in coming up with the application portfolio (Laudon, et al 1988). The other question is about the level of the incompatibility of equipment. However, the internet has influenced all this.
Finally, there is personnel linkage design. This addresses the functions of selection, appraisal and the compensation of the Information System personnel in the subsidiaries. Therefore, this is out to answer the question of the number of the employees who are able to speak the language, understand the culture and the political system. It also helps to show the expatriate of the employees who are proficient in emphasizing firm wide rather than local objectives.
The issues of the ISD supporting competitive strategy is mostly influenced by the industry level variable as well as the variable that are in the country level. When MNCs in the same industry operates in the same countries, they are hampering from exploiting comparative advantage sources that include lower labor cost, low materials among other things in comparison to another. Therefore, in such cases, information system must ensure that focus is placed in maintaining firm specific competitive advantages. Some of the examples are from transferring systems such as order entry terminals that are placed at the customer's premises that has created advantages in the home country to the host country (Laudon, et al 1988). On the other hand, when the multinational corporations operate in different countries the function of the Information Systems should focus its efforts on the exploiting sources of the comparative advantage.
Intergovernmental IS issues
The interaction that exists between the information system function and the intergovernmental units are concerned with either technical issues or regulatory concerns. Otherwise, this comes with several advantages from the user participation in the standard setting organizations for example International Standards Organization (ISO). The main advantage of this is that the firm will be kept informed of all the directions in the open systems standard and the technologies and the assessing their impact on the information system of the corporation infrastructure.
When coming up with a coherent international standards, it makes important for any IS function to have consistent pattern of the international regulatory practices that enables them to come up with informational transfers that is required in the global firm. These are what have made the information system and telecommunication issues became prominent international negotiations that involve World Trade Organization (WTO) (Laudon, et al 1988). Liberalization in general of the global communication is capable of bringing significant advantages to the multinational corporations.
Host governmental IS issues
The issues that pertain the interaction between the IS function and the host government come from the MNCs deployment of the information technologies and the host government reaction to it. These issues are categorized in four parts. These include political, economic, technological and socio-cultural.
Political issues are the concern for ownership and the sovereignty of a nation its resources including its information resources, the information technology in the form of satellite communications that can render national control of information ineffective. However, it is feared that the multinational corporations that have their headquarter in the countries that are developed may use the information system and the trans-border data flow to remotely control the physical operations of their business bringing the operation of the less developed country to a stand still.
Economic issues is the other one that was brought about in the form of restrictive policies that were against the use of IS for the fear of the displacement or the unemployment of the workers. Further more, host government policies for the development of the indigenous IS industries can force the IS function into reliance that is not favorable in outsourcing the host country and the deployment of the less than the optimal technologies (Laudon, et al 1988).
Technological issues are the other thing that relates to the host governments IS related policies regarding accessing communication facilities and international networks. Host governments have an interest in IS through which technology transfer takes place.
Socio-cultural issues also deals with the attitude of the host governments on the security of the needs of the individuals against the needs of the society. In places where there are no universal standards in the maintenance of the balance between the two hosts government often would like to see that MNCs practices do not stir opposition from the group or interests within society.
Reactive international IS issues
In most cases, national Informational System related policies are formulated inn response to the changes that are similar in policies in other countries. These policies relates an enduring impact on the IS functions of the MNCs. As shown by the National telecommunications and the information administration who are direct beneficiaries or victims of many policy decisions as private firms are critical in the nature of the effectiveness of the governmental decision-making.
In conjunction to the categories that have discussed above about the IS issues, there also inter-governmental bodies as well as interactions between the governmental and intergovernmental bodies. These translate to bilateral, regional and multilateral negotiations about the issues affecting directly and indirectly the informational system functions of these multinational corporations (Laudon, et al 1988).