8 Chapter Inter organi zati onal and Gl obal I nf ormati on Syste ms
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Learning Objectives
Define and classify IOSs. Define and classify global information systems. Present the major issues surrounding global information systems. Describe B2B exchanges, hubs, and directories. Describe virtual corporations and their IT support. Describe EDI and EDI/Internet and their benefits and limitations.8 MSIS 5623 Chapter
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Inter organizational Informa tion S yst em ( IOS)
Interorganizational information system involves information flow among two or more organizations. Its major objective is efficient processing of transactions, such as transmitting orders, bills, and payments. It can be global or local. When IOSs use telecommunications companies for communication , they employ value-added networks (VANS). These are private. A growing trend is use of the Internet. These are publicly accessible.
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Types of Inter organizational Sys tems B2B trading systems. These systems are designed to facilitate trading
between (among) business partners. The partners can be in the same or in different countries. B2B trading systems were covered in Chapter 4, where we described both company-centric (private) e-marketplaces and many-to-many public exchanges. B2B support systems. These are nontrading systems such as hubs, directories, and other services. Global systems. Global information systems connect two or more companies in two or more countries. The airline reservations system, SABRE, is an example of a huge global system. Electronic funds transfer (EFT). In EFT, telecommunications networks transfer money among financial institutions. Groupware. Groupware technologies (Chapter 3) facilitate communication MSIS 5623 Chapter 8 4 and collaboration between and among organizations.
Types of Inter organizational Sys tems contin ued
Integrated
messaging. A single transmission system can be used to deliver electronic mail and fax documents between organizations (see Chapter 3). Shared databases. Trading partners sometimes share databases in order to reduce time in communicating information between parties and to arrange cooperative activities (see Chapters 3, 4, and 8). Systems that support virtual corporations. These IOSs provide support to virtual corporationstwo or more business partners, in different locations, sharing costs and resources to provide8a product or service. MSIS 5623 Chapter 5
ISO Support Technol ogie s
The four major IOS technologies are: Electronic Data Interchange (EDI), (EDI) the electronic movement of business documents between business partners. Extranets, extended intranets that link Extranets business partners. XML, an emerging B2B standard, XML promoted as a companion or even a replacement for EDI systems. WEB Services, the emerging technology Services for integrating B2B and intrabusiness applications.
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Global In for ma tion Syst ems
Benefits
Effective communication at a reasonable cost. The partners are far from each other, yet they are able to work together, make decisions, monitor transactions, and provide controls. Business partners communicate through e-mail, EDI, Web Services (see the Dell opening case), and extranets. Communication is even more critical if the partners speak different languages. Intelligent IT systems can provide automatic translation. Effective collaboration to overcome differences in distance, time, language, and culture. Collaboration can be enhanced with groupware software (Chapter 3), group decision support systems (see Chapter 11), extranets, and teleconferencing devices (Chapter 3). Access to databases of business partners and ability to work on the same projects while their members are in different locations. Information technologies such as video teleconferencing and screen sharing (Chapter 3) are useful for this purpose.
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Issues in Global IS Design
Cultural Differences. Culture consists of the objects, values, and other characteristics of a particular society. It includes many different aspects ranging from tradition, to legal and ethical issues, to what information is considered offensive. When companies plan to do business in countries other than their own, they must consider the cultural environment. Localization. Many companies use different names, colors, sizes, and packaging for their overseas products and services. This practice is referred to as localization. In order to maximize the benefits of global information systems, the localization approach should also be used in the design and operation of such systems. Economic And Political Differences. Countries also differ considerably in their economic and political environments. One result of such variations is that the information infrastructures may differ from country to country. Legal Issues. Legal systems differ considerably among countries. Examples are copyrights, patents, computer crimes, file sharing, privacy, and data transfer.
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B2B Exchanges, Hubs Direct ories
, and
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A virtual corporation (VC) is an organization composed of two or more business partners, in different locations, sharing costs and resources for the purpose of producing a product or service.
Virt ual Cor porati ons and I T Su pport
Most VCs cannot exist without information technology.
E-mail Desktop videoconferencing Screen sharing and other groupware technologies EDI and EFT Database and network sharing
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Electr onic Dat a I nt erchange (E DI)
EDI is a communication standard that enables the electronic transfer of routine documents, such as purchasing orders, between business partners. Traditional EDI has been around for about 30 years. EDI reduces costs, delays, and errors inherent in a manual document delivery system.
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Electr onic Dat a I nt erchange (E DI) cont inued
EDI translators. An EDI translator converts data into a standard format before it is transmitted; then the standard form is converted to the original data. Business transactions messages. These include purchase orders, invoices, credit approvals, shipping notices, confirmations, and so on. Data formatting standards. Because EDI messages are repetitive, it makes sense to use formatting standards. (coding) In the United States and Canada, EDI data are formatted according to the ANSI X.12 standard. An international standard developed by the United Nations is called EDIFACT.
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Electr onic Dat a I nt erchange (E DI) cont inued
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Electr onic Dat a I nt erchange (E DI) cont inued
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Electr onic Dat a I nt erchange (E DI) cont inued
Accessibility. The Internet is a publicly accessible network with few geographical constraints. Its largest attribute, large-scale connectivity (without the need for any special company networking architecture), is a seedbed for growth of a vast range of business applications. Reach. The Internets global network connections offer the potential to reach the widest possible number of trading partners of any viable alternative currently available. Cost. The Internets communication cost can be 40 to 70 percent lower than that of VANs. Transmission of sensitive data can be made secure with VPN. Use of Web technology. Using the Internet to exchange EDI transactions is consistent with the growing interest of business in delivering an ever increasing variety of products and services via the Web. Internet-based EDI can complement or replace many current EDI applications. Ease of use. Internet tools such as browsers and search engines are very user friendly, and most employees today know how to use them. Added functionalities. Internet-based EDI has several functionalities not provided by traditional EDI, which include collaboration, workflow, and search engine capabilities (see Boucher-Ferguson, 2002).
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Electr onic Dat a I nt erchange (E DI) cont inued
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Ex tranet s, XM L, and WE B Serv ices
Extranets are networks that link business partners to one another over the Internet by providing access to certain areas of each others corporate intranets.
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Ex tranet s, XM L, and WE B Serv ices
Three major types of Extranets A Company and its Dealers, Customers, or Suppliers. An
example is FEDEX Extranet that allows customers to track the status of a package.
An Industrys Extranet. The worlds largest industry based ,
collaborative extranet is by General Motors, Ford, and DaimlerChrysler. That Extranet ,called Automobile Network Exchange (ANX), links the carmakers to 10,000 suppliers.
Joint Ventures and Other Business Partnerships. An example
is Bank Of Americas Extranet for commercial loans.
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Ex tranet s, XM L, and WE B Serv ices
XML (eXtensible Markup Language) is a simplified version of a general data description language known as SGML.
XML describes data and information. XML does not say how the data will be displayed. XML can be used to send complex messages that include different files. XML and HTML are not the same. XML is a flexible language. XML is easily read and understood. XML requires less specialized skills.
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Ex tranet s, XM L, and WE B Serv ices
WEB Services are universal, prefabricated business process software modules, delivered over the Internet, that users can select and combine through almost any device, enabling disparate systems to share data and services.
Web services can support IOSs by providing easy integration for different internal and external systems. Such integration enables companies to develop new applications .An example is Allstate Financial Group used Microsoft.NET (a Web Services implementation) to create AccessAllstate.com, a Web Portal that allows its 350,000 sales representatives to access information about Allstate investment, retirement, and insurance products.
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Management
Every company that has business partners has to manage the relationships with th...