With the increasing globalisation of business, multinational corporations (MNCs) are no longer able to compete in the format of having nationally independent subsidiaries. Instead, the need has arisen for MNC’s to integrate their subsidiary activities across geographical divisions. However, building an efficient international information system to support information exchange and parent-subsidiary linkage involves the resolution of many technical and managerial Information Systems (IS) issues, stemming from both the parent MNC and its subsidiary.
Parent Organisation Issues
The problems associated with the planning and control of a multinational Information Resource Management function (IRM) have led to difficulties as MNC’s attempt to deal with the complexities that geographical and associate differences have imposed on their international IRM functions.
The Management Information System’s (MIS) role in the IRM planning and coordination process is to provide the assistance required to implement such plans along with providing strong coordination. The corporate MIS planning role includes developing, maintaining, and enhancing the plan procedures and processes, along with identifying key issues and conducting studies to assess the technology.
Subsidiary Company Issues
Lai’s survey indicated that the top three IS issues rated by foreign affiliates of MNC’s include:
i) IT infrastructure
ii) Information architecture
iii) Communication networks
Subsidiaries of MNC’s generally operate in less developed countries may have issues and restrictions such as inefficient communication networks and IT infrastructures. Such technological restrictions can have many detrimental effects on the subsidiaries, including curtailing the ability to make IS strategic decisions, increasing IS costs due to inefficient handling of IT resources, causing high error rates during data transmission, creating difficulties for system maintenance, and increasing the complexity of technology transfer and integration. If these technology infrastructure issues are unresolved, foreign subsidiaries would not be able to take advantage of economies of scale and the cost efficiencies associated with the technological advances in IT. Thus, subsidiaries need to build a responsive information infrastructure to support and enhance their existing and future applications.
When information infrastructure and IT architecture are not solidly implemented, the subsidiary’s data and resources will be scattered throughout their computing networks without a structured plan, making the distribution process and data integration impossible.
Information Resource Management Planning
Some of the key changes to evolve traditional IRM planning into a viable and dynamic process include the following:
i) The inclusion of additional levels of individuals, organisations, and functional groups must be involved in the planning process through more participative multi-level and multi-process mechanisms.
ii) Strong business and IRM plan links must be established by joint business and IRM coordination and planning at all levels involving multiple executive, functional and IRM personnel across business and geographic regions.
iii) Development of a uniform and coordinated IRM planning language, process, structure, and cycle.
iv) The perception of what IRM contributes to the business must change. Understanding the business and related IRM strategic postures can help provide the best possible plan for the future.
v) The role of the corporate IRM staff should be well defined and limited to only those activities where its expertise is either clearly recognised, through creditability, or established by corporate policy. Utilise corporate IRM personnel, both generalists and specialists, as catalysts and change agents to question, motivate, encourage, and guide the business units on a multi-level basis.
vi) Recognise that the IRM concept requires a macro approach to managing a growing and vital asset that will involve significant changes in awareness, structure, discipline, and political loyalties. The conceptual architecture of the IRM environment must be established.
vii) Separation of IRM responsibilities between strategic direction and day-to-day operational support is a critical prerequisite for success. Adequate resources must be allocated to this process.
viii) Operations must start to develop systems by using their chart of accounts to track the true course of information processing in every segment of the business. This will establish a more accurate baseline to evaluate the benefits of IRM in the future.
ix) Focus on proactive, positive, incremental, and iterative strategies that propel the IRM Committee into the new role of the strategic integrators of the organisation’s information resources through the support of a multi-disciplinary IRM staff function.
Information Resource Management Functions
To plan effectively for the IRM functions, the following six planning phases should be completed for all IRM components. Each phase includes a series of activities:
i) Environmental Reference Base – This provides an external and internal environmental profile, both domestically and internationally, of the factors influencing existing business and IRM conditions in terms of problems, stages of penetration, resource levels, strengths etc.
ii) Issues and Opportunities – This identifies and relates business issues and objectives with IRM issues, opportunities, goals and objectives from a corporate, domestic, and international perspective.
iii) Strategic Analysis of Alternatives – This evaluates the various available strategic IRM alternatives in terms of organisation structures, mission statements, benefits, strategies, risks, obstacles, vulnerabilities, resource requirements, key assumptions, and contingency plans.
iv) Strategic Objective Setting and Commitment – This involves the actual planning and development of strategies along with the IRM implementation strategy.
v) Systems Development Methodology – This attempts to convert the strategic IRM plan into separate work projects through a systems development methodology, which consists of multiple phases, management approvals, and resource allocations.
vi) Follow-up and Measurement – This involves a review mechanism of the plan based on a series of pre-established requisites such as budgetary reviews, capital expenditure linkages to the plan, major project checkpoint reviews, periodic performance audits, adherence to standards and/or guidelines, and other monitoring mechanisms.
This article explores technical and managerial Information Systems (IS) issues experienced by multi-national corporations (MNCs). The article lists key concepts in today’s information resource management planning, as well as six planning phases involved in information resource management.
CIPP Exam Preparation
In preparation for the Certified Information Privacy Professional/United States (CIPP/US) exam, a privacy professional should be comfortable with topics related to this post, including:
- Key considerations for US-based multi-national corporation (I.C.i.)