Chapter 7
Global Information SystemsDr Tino Museba
Learning Objectives
- Discuss the reasons for globalization and for using global information systems, including e-business and Internet growth
- Describe global information systems and their requirements and components
- Explain the four types of organizational structures used with global information systems
- Examine five obstacles to using global information systems
Why Go Global?
- Global economy: increased customer demand for integrated worldwide services; expansion of global markets
- Success requires understanding: customs & lawstechnological issueslocal business needs & practices
- Global products increasingly important in marketing; operations often regionalized
- Worldwide purchasing exposes suppliers to domestic and foreign competition
- Large global organizations reduce costs in purchasing, manufacturing, distribution; access cheaper labor; sell locally and internationally
Driving Forces: E-Business, Internet & Mobile Computing
E-Business: a major driving force behind global IS. Adds network flexibility to traditional business, creates new commercial opportunities, enables comparison shopping, benefits small companies, and lets companies replace internal networks with the Internet.
Internet growth: forces businesses to build websites appealing to global customers. Localization = creating separate websites for each country of operation.
Rise of non-English speakers: the top ten languages cover about 77% of the world's Internet users (English, Chinese, Spanish, Arabic, Portuguese, Indonesian/Malaysian, Japanese, Russian, French, German) — great opportunities and challenges.
Mobile computing: apps deliver basic social services and commerce (banking, payments, agricultural info). Examples: M-Pesa (mobile payment), SoukTel (job info), Esoko (farmer social networking), Frogtek (small-retailer inventory), Ver Se' Innovation (classified ads).
GIS Overview, Components & Requirements
- Global Information System (GIS): an information system that works across national borders; facilitates communication between headquarters and subsidiaries; gathers, stores, manipulates, and transmits data across cultural and geographic boundaries
- Two dimensions: Control (managerial power ensuring adherence to goals) and Coordination (interaction among specialized parts)
Two basic components: ① a global database (challenges: design & implementation, currency conversion) ② information-sharing technologies (small companies outsource; large companies build custom solutions)
IS manager responsibilities: choose the best communication media, best transmission technology, network architecture aligned with company objectives, and type of information-sharing technology.
Standardized hardware/software: ideal but not always feasible due to language and business-practice differences. Transborder Data Flow (TDF): restricts what data can be captured and transmitted in foreign countries.
Multinational Corporation (MNC): assets and operations in at least one country other than home country; centrally managed from headquarters. Global risks: politicalforeign exchangemarket
GIS support classifications: ① operational support (day-to-day) ② tactical support (medium-range) ③ strategic support (broad, long-term goals)
Issues before implementing a GIS: identify global business opportunities → justify the investment → screen personnel for technical & business expertise → carefully coordinate migration to GIS
Four Organizational Structures ★ Exam Favorite
| Structure | Characteristics | Key Points |
|---|---|---|
| Multinational | Production, sales, marketing decentralized; financial management centralized at parent | Less need for HQ–subsidiary communication; subsidiaries make many decisions themselves |
| Global | Highly centralized IS; little subsidiary autonomy; heavy reliance on HQ | Needs an extensive communication network — GIS fits well; organization also called a franchiser; subsidiaries handle selling, marketing, and local tailoring |
| International | Operates much like an MNC; subsidiaries depend on HQ for process & production decisions | IS personnel regularly exchanged → cooperative culture → high GIS feasibility; GIS can be centralized or decentralized |
| Transnational | Parent and subsidiaries work together; HQ in no particular country; regional divisions share authority | Focuses on optimizing supply sources; GIS needs high standardization (universal data dictionaries + standard databases) while maintaining local responsiveness |
💡 Remember: the organization's structure determines the architecture of its GIS. Global = highly centralized; Transnational = collaborative + standardized.
GIS Supporting Offshore Outsourcing
- Choosing an outsourcing firm in another country for services/products; driven by widespread Internet availability, improved telecom, reduced communication cost, increased bandwidth
- Country rating criteria: language proficiency, local government support, potential labor pool, existing infrastructure, quality of the educational system
Five Obstacles to Using a GIS ★ Exam Favorite
- 1Lack of standardization — costly to integrate different platforms; too much standardization reduces local flexibility; time-zone difficulties; backup & maintenance
- 2Cultural differences — values, attitudes, behaviors; website content/images must suit the target market; best addressed with education & training
- 3Diverse regulatory practices — jurisdiction issues, intellectual property laws & enforcement, software piracy, privacy & cybercrime laws, censorship, government control
- 4Poor telecommunication infrastructures — different service offerings, price schedules, policies; avoid high-bandwidth graphics/animations
- 5Lack of skilled analysts and programmers — culture affects team building; online training & certification can close the skills gap
💡 A proactive approach increases the chance of GIS success.
Chapter 10
Supporting Decisions and ProcessesDr Lucas Khoza
Learning Objectives
- Examine the types of decisions made in each phase of the decision-making process
- Describe a decision support system (DSS)
- Explain an executive information system's importance in decision making
- Summarize the uses for a geographic information system
- Describe collaboration systems — types and selection criteria
- Apply the eight guidelines for designing a management support system
Types of Decisions in an Organization ★ Exam Favorite
| Type | Definition | Examples |
|---|---|---|
| Structured | Can be automated — a well-defined standard operating procedure exists | Record keeping, payroll |
| Semistructured | Not fully defined, but include a structured aspect | Sales forecasting, budget preparation |
| Unstructured | One-time decisions, no standard procedure; intuition plays a key role | Executive information systems |
- Challenge in semistructured/unstructured decisions: multiple criteria; conflicting objectives
- Management Support Systems (MSSs): different types of IS developed to support certain aspects and types of decisions, each with unique goals
Phases of Decision Making ★ Exam Favorite
Economist Herbert Simon defined three phases; a fourth was added later:
| Phase | Content | IT Support |
|---|---|---|
| 1. Intelligence | Scan the environment, collect & process data, identify the problem, discover alternatives | Data collection & processing |
| 2. Design | Define decision criteria, generate alternatives, link criteria to alternatives | IT does NOT support this phase; collaboration & video-conferencing can help |
| 3. Choice | Analyze each alternative against criteria; select the best course of action | DSS supports this phase (cost-benefit ratio tools) |
| 4. Implementation | Devise an execution plan, obtain resources; ideas become actions | DSS performs follow-up assessment |
💡 Mnemonic: Intelligence → Design → Choice → Implementation (Simon's original three = first three). Design = no IT support; Choice = DSS support!
Decision Support Systems (DSS)
- Definition: an interactive information system designed to assist decision makers; consists of hardware, software, data, and mathematical/statistical models
- Requirements: interactive; incorporates the human element; uses internal & external data; includes math/statistical models; supports all levels; emphasizes semistructured & unstructured tasks
Three components: ① Database (internal + external data, DBMS) ② Model base (mathematical & statistical models) ③ User interface
DSS capabilities: what-if analysis, goal-seeking, sensitivity analysis, exception reporting analysis, optimization analysis — plus graphical analysis, forecasting, simulation, statistical analysis, modeling analysis
Roles in the DSS environment:
- Users — they use the DSS; may include units, not just people
- Managerial designer — defines management issues: what data to collect, from what sources, how to organize it, update frequency, aggregated vs. disaggregated balance
- Technical designer — implementation: data storage, file structure, user access, response time, security
- Model builder — liaison between users and designers: what the model does, inputs accepted, output interpretation, assumptions
Costs & benefits: value is a better measure than cost. Benefits: more alternatives examined, fast response to surprises, one-of-a-kind decisions, new insights & learning, improved communication/control/decisions, cost & time savings, effective teamwork.
Executive Information Systems (EIS)
- Definition: gives executives easy access to DSS data; most include a digital dashboard — integrates information from multiple sources into one unified, understandable format
- Key characteristics: tailored to management's needs, tracks & presents critical data in multiple formats, online access & analysis tools, internal & external data, customized development tools, supports electronic communication
- Reasons for use: analytical & decision-making tools, graphical data, quick information sharing, improved efficiency & effectiveness
Factors that lead to a failed EIS: organizational resistance, seen as unimportant, loss of management interest, undefined objectives, objectives not linked to organizational success, unjustifiable costs, overly long development / too complicated, vendor support discontinued, lack of understanding of executives' needs.
Geographic Information Systems (GIS)
- Definition: captures, stores, and analyzes data to support location-related decision making
- Two major components: digitized mapsspatially oriented databases
- Tasks: associate spatial attributes with map locations, integrate map data with queries; analytical GIS interprets spatial data to evaluate a decision's impact (example: Google Maps)
- Applications: education planning, urban planning, government, insurance, marketing, real estate, transportation & logistics
Collaboration Systems
- Definition: software that assists group decision-makers by providing access to a shared environment and information
- Advantages: easy communication & coordination, higher productivity, teamwork, time savings, reduced travel costs & stress
- Disadvantages: lack of human touch & nonverbal cues, unnecessary meetings, security problems
- Success depends on: matching the system's sophistication to group size & task scope + supportive management championing it
Synchronous or asynchronous — three broad groups: ① communication software (communicate & share files) ② task management software (prioritize & track tasks) ③ document & content management software (work together on files)
Choosing the right software: define your needs (you may only need a few components) → compare prices (most expensive ≠ best) → evaluate vendor support (updates, user groups, support offered)
Eight Guidelines for Designing an MSS ★ Exam Favorite
- 1Get support from top management
- 2Clearly define objectives and benefits
- 3Identify executives' information needs
- 4Keep lines of communication open
- 5Hide system complexity — keep the interface simple
- 6Keep look and feel consistent
- 7Design a flexible system
- 8Make sure response time is fast
Glossary
Key Terms Quick Reference
| Term | Meaning |
|---|---|
| Global Information System (GIS) | An IS that works across national borders (Ch. 7) |
| Localization | Creating separate websites for each country of operation |
| Transborder Data Flow (TDF) | Restrictions on what data can be captured/transmitted in foreign countries |
| MNC (Multinational Corporation) | Assets/operations in at least one country other than home; centrally managed |
| Offshore Outsourcing | Using a firm in another country to provide services/products |
| Franchiser | An organization with a global (highly centralized) structure |
| Structured / Semistructured / Unstructured decisions | Automatable / partly defined / one-time intuition-based |
| MSS (Management Support System) | Umbrella term for IS supporting specific decision types |
| DSS (Decision Support System) | Interactive IS assisting decision makers: database + model base + user interface |
| EIS (Executive Information System) | Easy executive access to DSS data; includes a digital dashboard |
| Digital Dashboard | Integrates information from multiple sources into one unified format |
| GIS (Ch. 10) | Geographic IS — supports location-related decisions (digitized maps + spatial databases) |
| What-if / Goal-seeking / Sensitivity analysis | Core DSS analysis capabilities |
| Synchronous / Asynchronous | The two communication modes of collaboration software |
Quiz
Pre-Exam Self-Test
1. What are the two basic components of a global information system?
A global database and information-sharing technologies.
2. Along which two dimensions is a GIS defined?
Control and coordination.
3. Which four organizational structures determine GIS architecture? What are their IS characteristics?
Multinational (decentralized), Global (highly centralized — a "franchiser"), International (staff exchange, cooperative culture), Transnational (collaborative, high standardization + local responsiveness).
4. What are the five obstacles to using a GIS?
Lack of standardization, cultural differences, diverse regulatory practices, poor telecommunication infrastructure, lack of skilled analysts and programmers.
5. What are the four phases of decision making, and how is each supported by IT?
Intelligence (data collection), Design (no IT support), Choice (DSS support), Implementation (DSS follow-up assessment).
6. What are the three DSS components and its core analysis capabilities?
Database, model base, user interface; what-if analysis, goal-seeking, sensitivity analysis, exception reporting/optimization analysis.
7. What are the four roles in the DSS environment?
Users, managerial designer, technical designer, model builder.
8. What are key EIS characteristics and causes of EIS failure?
Digital dashboard, tailoring, internal & external data access, etc. Failure: organizational resistance, undefined objectives, unjustifiable costs, discontinued vendor support, and more.
9. What are the two components of a geographic IS and its application areas?
Digitized maps + spatially oriented databases; education/urban planning, government, insurance, marketing, real estate, transportation & logistics.
10. What are the eight guidelines for designing an MSS?
Top-management support, clear objectives, identify executives' needs, open communication, simple interface, consistent look & feel, flexibility, fast response time.
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