The Blog

“It has been said that arguing against globalization is like arguing against the laws of gravity.” – Kofi Annan, 7th Secretary General of the United Nations

Summary:

The rapid change in technology has brought different benefits and challenges to IT leaders. The article “Globalization: New Management Challenges Facing IT Leaders” talks about these different challenges and gives the readers different insights on how CIOs approaches these challenges.

These days CIOs have broader geographic responsibilities. In the case of Wayne Shurts, Cadbury’s CIO, his responsibilities span from Pakistan to Palau and globe-trotting from his home in New Jersey to the London headquarters and to operations in six continents. Emerging markets and setting up IT infrastructures in different parts of the world poses different challenges, different propositions, and creative solutions. The key is understanding the company’s business model and providing a solution that will benefit the company’s global market both economically and culturally.

The mindset for global CIOs is, “Know what you’re up against.” What is applicable in one country is not necessarily adaptable to another. A good example of this is Cadbury IT that uses sophisticated tools to analyze money spending on corporate programs which they use for promotions. This doesn’t mean that the tools they used in United States can be used in India or South America as the market there is entirely different. Mom-and-Pop shop rules in India and South America versus big retail stores in USA, Canada, and Australia.

Culture is another important element that global CIOs need to keep in mind. Different countries have different sets of cultures that can affect turnaround time. In some cultures, urgency does not drive day-to-day business, which means that employees in that culture may require more supervision to get things done. Employee retention is also dependent in the culture of a country which sets another big challenge in keeping trained and highly skilled professionals.

Rethinking the norms can be both challenging and beautiful. Challenges in emerging markets are what a global CIO are expected to thrive on. The challenges and solutions that CIOs handle are hardly ever learned from a working environment that exists in an established and developed market. But the opportunity of learning and finding solutions to these emerging markets is what makes the situation beautiful. CIOs are forced to test their assumptions about their existing practices and in the process might even develop an idea that works better globally.

Contribution:

“The whole pace of business is moving faster. Globalization is forcing companies to do things in new ways.” – Bill Gates

The article contributes by giving insight on what the challenges of globalization are. It paints a picture of what effective globalization looks like from the perspective of the person responsible for its effectiveness. It also illustrates the common challenges of globalization: culture, local staffing, IT infrastructure, technology, smaller budgets, and target markets. But the biggest contribution of the article is enlightenment: that Globalization, challenges and all, is a reality and that it is changing the way we should run our businesses, and ultimately, how we perceive the world. As part of the maturation process of globalization we are faced with different challenges, and as strategies and implementations may succeed or fail, CIOs and IT professionals must try and to be a part of it instead fearing it or just watching it happen without them.

Integration:

Markets have different needs and demands. This is why the article emphasizes that you should know what you are up against and understanding what is applicable in that emerging market.

The Strassman video about outsourcing clearly indicates that it is not always profitable and does not always equate to lower costs. There are effects that should be considered in decision making that will make outsourcing work effectively.

This is exactly what Cadbury did. The company understands that the market in the US, Australia, and Canada are laser focused in terms of trade promotion management. The tools used in these established markets do not necessarily apply to the markets in India and South America. Cadbury’s businesses in those regions are driven by mostly mom-and-pop shops, which do not necessarily require the use of sophisticated tools. Instead of investing money on the infrastructure, training, licensing, and implementation of unnecessarily sophisticated tools, the focus can be shifted to tools that simply determine correct delivery routes, make sales calls, and take orders.

Culture is another element that must always be placed in the equation. The article illustrates this point with an example from John Topete’s experience in Dubai. The expression “Insha Allah” is a concept that is foreign for American CIOs. The 50/50 answer that something would actually happen is not part of the business norms in America but is part of the business norms in Dubai. This is part of the tabula rasa where you really don’t know what to expect until you get there.

The video of Thomas Friedman “The other side of outsourcing” touches the culture aspects of outsourcing but from the point of view of India. We have learned from the video that people from India also need to adjust and learn the American culture for them to be more effective in communicating in call centers. This just simply shows that in globalization both parties need to learn and adjust to new ways for this process to be effective.

Critique/Analysis:

Technology has simply changed the way we live. There are so many challenges have risen and are yet to arise as our world embraces globalization.

Anyone who has an internet connection can simply get a job in the US and offer the same skill-set of a US -based person at a fraction of the cost. This is exactly what Thomas Friedman explains in his video “The world is flat”. There are 10 flatteners that levels the playing field. Among the 10 there are 3 flatteners that are applicable to the topics that we have discussed in class. These are: outsourcing, insourcing, and supply chain.

Outsourcing simply allowed companies split services and manufacturing into components which can be subcontracted. This has become easier with the boom of the world wide web and the implementation of fiber optics. Another proof that technology changed the way we live.

Friedman’s example of supply chain is WalMart, a company using technology that perfected item sales, distribution, and shipping.

UPS is the company Friedman uses for insourcing where the company’s employees perform services beyond shipping for another company. As an example Friedman cited that UPS repairs Toshiba computers on behalf of Toshiba. Work is done at the UPS hub.

These three flatteners I have mentioned are just some elements global CIOs need to understand. By studying how other companies have successfully implemented such new practices into an emerging market, CIOs can learn from other companies’ mistakes to minimize their own. Such practices can be applied to some industries and may not be applicable to others.

Globalization has not only made CIOs adapt to new practices but also open doors to new technology and innovation. The technology I am talking about is Social Media and Web 2.0. More and more ideas are being brought to life because of online collaboration. Web 2.0 properties are being created because it is a lot easier for someone who has a great idea to hire someone to turn his idea into a fully functional website. This simply shows that not only big companies can take advantage of globalization but people like us can benefit from it and turn ideas into profit.

Lessons Learned:

As technology changes our lives a new set of challenges arise. While we learn to adapt to these changes CIOs also need to learn new processes and rethink how their company is doing business.

Globalization has challenges but it also brings new opportunities. Though some consider globalization to be disadvantageous to United States manufacturing, many simply agree that old economy is just simply being replaced by a new economy that forces businesses to adapt in globally creative ways.

A majority would agree that many jobs are disappearing because of globalization. But by analyzing and understanding the situation one would see that it opens new jobs as well. I believe that with the emergence of new jobs Americans need to keep updating their workforce, making us more employable and adaptable.

CIOs must understand the challenges of emerging markets. From cultural differences, local staffing, technological challenges, smaller budgets and target markets these factors are part of the challenges the new breed of CIOs will face as we transform into a global economy.