Global Business Drivers: Aligning Information Technology to Global Business Strategy

The alignment of worldwide computer-based information systems and integrated business strategies is critical to the success of multinational firms in a highly competitive global market. In this paper, information technology (l m solutions are explored that drive firms toward making economic decisions based on worldwide distributed knowledge. These solutions focus on a number of entities (or global business drivers) that identify where a firm can benefit most from the management and application of the technology. A variety of approaches for overcoming the barriers and risks of applying this technology are also discussed. I n the forefront of the transition of a firm to a globally coordinated and managed organization is information technology. Information technology can drive the change, be harnessed to it, or rise up as a severe impediment. The chief executive of a major corporation has suggested that " globalization is no longer an objective but an imperative, as markets and geographical barriers become increasingly blurred and even irrelevant .' " This paper explores how the application of information technology to the transition process can result in successful firms in a global market. Information technology (IK) can drive a firm toward globalization in a number of ways. Using computer and communications technologies, firms can extract the information components from tangible products, or substitute knowledge for material, and then instantly transport the electronically represented information or knowledge throughout the world. Value can be added or an information-based product can be used at the most economically advantageous location. The time delays, high costs, and lack of customer responsiveness associated with transportation, reproduction , and inventoly can be reduced or even eliminated. This instantaneous " world reach " produces major changes in order management, manufacturing, and marketing cycles. For example , the Society for Worldwide Interbank Financial Telecommunications (SWIFT) system electronically moves money freely and rapidly across national boundaries and toward those investments that offer the greatest return. The system allows credit transfers between some 1500 banks in approximately 70 countries. In a given day, as much as $700 billion is transmitted through the system. * Hamilton argues that information technology in the financial services industry has created a totally new system of world finance: " The growth of international communications, the de-Wopyright 1993 by International Business Machines Corporation. Copying in printed form for private use is permitted without payment of royalty provided that (1) each reproduction is done without alteration and …