The Globalization of Information Technology in Multinational Corporations.

• Author: STEPHENS, DAVID O.

One of the most significant business trends during the 1990s has been the sharp increase in global business activity and, despite recent economic turmoil in Asia and Latin America, there is no sign that this growth will abate. The explosive growth of the Internet and the World Wide Web -- technologies that are inherently global in character -- has been of equal or even greater significance. These trends create unprecedented challenges and opportunities for multinational companies.

For information managers of multinational companies to respond effectively, they need to be fully conversant with important issues related to the international aspects of document technologies and business recordkeeping. This brief introduction is written for information specialists -- i.e., computer systems specialists document management or knowledge management specialists, records managers, and others -- involved in international initiatives at multinational corporations.

Multinational Companies and Global Business

For multinational companies today, global customers demand global products. Further, multinational businesses can realize cost advantages in traditional input factors such as labor and raw materials. Finally, multinational companies endeavor to leverage their investment in knowledge and technology on a global basis. For example, global pharmaceutical companies operate research and development labs in Europe, Asia, and North America. They perform new drug development at whatever location has the best scientific expertise to do it -- or indeed at all global locations simultaneously -- and share data throughout the world.

Computer networks allow multinational companies to provide worldwide, real-time services all the time. Customer requests can be transferred across continents and time zones without the customer ever knowing that the work is done on the other side of the world. For the first time ever, time and space independence is achievable for any business that operates in global markets. Thus, enabled by new technology, today's global businesses are not so much multinational as they are transnational.

As the world economy continues to globalize and integrate, the imperatives for management to act in a globalized manner become more crucial. Companies must therefore rethink and reengineer their entire business processes -- their organizational structures, staffing, and especially their information systems and technology infrastructures on an international level. Those which fail to do this will never be able to attain or maintain a competitive edge in global markets.

Globalizing the IT Infrastructure

To understand international information management for multinational corporations, it is essential to understand the agendas of information technology departments as they attempt to extend their global reach throughout the economies of many countries. Globalized IT agendas reflect current trends in the global economy: greater integration of mature markets, newly emerging markets, common currencies (e.g., the Euro), new trading partners, and the overriding impact of the Internet and its related technologies in stimulating global business activity. For IT departments in multinational companies, these trends mean greater worldwide standardization of computing platforms, vastly increased global information flows, and many other technical, legal, and cultural issues.

The goal of IT departments of multinational companies can be simply stated: To create globally integrated information infrastructures that electronically link their entire supply chains -- their sales, production, and delivery processes -- into one seamless flow of information across national borders and time zones, with both real-time and store-and-forward access to information from any location. The global corporate network thus becomes the entire knowledge repository of the enterprise and the key delivery system for supporting global business operations.

Executives of multinational companies see many benefits to this global integration of information systems, including shorter cycle and delivery times, closer relationships with business partners, greater flexibility in sourcing products or services, better inventory controls, and of course, improved customer satisfaction, cost reductions, and increased profits. In short, a more competitive business.

The foregoing business goals provide compelling justification for multinational companies to achieve worldwide integration of information systems, but how much has actually occurred? According to a recent survey of more than 400 multinational IT managers conducted by Information Week magazine, global businesses have a long way to go before truly globalized information systems are in place. The survey results indicate that only 36 percent of U.S. companies that purchase or...