Thinking locally acting globally: that's not an easy concept for a lot of multinational companies, but an Oracle executive argues that the old ways of deferring to local practices need to be abandoned in favor of global standardization.

AuthorMiranda, Steve
PositionGlobal Business

A surprising number of companies that operate around the world have yet to realize the benefits of globalization. Instead of achieving the economy of scale of a global enterprise, many multinational corporations still function as a loose confederation of U.S. and foreign business interests, each with its own reporting systems, business practices and IT solutions.

At a time when corporate accountability is under intense scrutiny, financial officers often must certify the performance of diversified holdings around the world without standardized processes or integrated information systems.

Moreover, with scores of data silos around the world, companies operate with huge information blind spots. It can take weeks, even months, to collect, reconcile, translate and analyze a company's regional and overall performance. As one CFO ruefully puts it, "What I get every fiscal quarter is a global headache."

The situation is an outgrowth of outdated technology and practices. For decades, the prevailing wisdom for companies expanding oversea was: "Think global, act local." This market theory was based on acculturation: the practice of customizing product and services for regional consumption in accordance with the local language(s), currency, culture and regulatory climate. Not surprisingly, localization encouraged each country of operation to develop its own customized IT solution.

There is a difference between operating around the globe and being global. Globalization refers to the process of streamlining and standardizing communications, business functions and management practices throughout the global organization. While the global offices remain sensitive to cultural and compliance issues in the markets they serve, the organization functions as an integrated, global enterprise. This model, reflecting the new economic realities of a 24/7 global marketplace, can be summarized as "think local, act global."

Globalization touches all businesses, regardless of size. A small company or specialty manufacturer might not serve an international audience, but the organization can improve its supply-side economics by finding alternate sources of product and services in other markets. For large corporations, the benefits are far-reaching -- literally spanning the globe.

Change the Culture

Among companies around the world, there is near-unanimous agreement that globalization is a strategic priority, yet uncertainty exists over how to enact such comprehensive change. Corporate decision-makers tend to see globalization primarily as a technology challenge, but experience...

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