Critically evaluate the strategic role of global information systems Essay

Critically evaluate the strategic role of global information systems for organisations and discuss the management issues associa - Essay Example Information systems have, therefore, had a profound effect on the performance of global businesses by transforming their ability to deliver value to customers (Czinkota et al., 2005). However, the application of information system has unfortunately stemmed on the basis of companies’ internal operations with little focus of the global paradigm. This means that international requirements, including cross-cultural differences, have yet to be fully materialized into the information systems used by these global businesses. Most often global information systems are evaluated from the same perspective as their local counterparts; however, the former demands attention to some particular aspects. An integrated and holistic information systems approach has enabled organizations conduct business processes online (e-business), co ordinate upstream and downstream supply chain partners (e-commerce) and enable entrepreneurs streamline their innovative ideas and creativity (Pearlson & Saunder s, 2009). The key to competitive advantage in today’s world, therefore, does not lie in traditional cost reduction or differentiation techniques but in rapidly adapting to changing customer tastes and implementing learning and innovation to product offerings in real-time (Phillips & Haag, 2009). As an extension to Porter’s resource based view, researchers explored the direct positive relationship between effective information management and company success by explaining how information used could enhance the organization’s learning, innovation and creative abilities. The virtual value chain is centered on the notion of seamless flow of information across all levels of the organization that enable it to deliver value to its customers. Therefore, information systems have been linked to the dramatic improvement of the value chain, marketing strategies, customer service and internal communications framework. However, â€Å"global† information systems go far b eyond just that. Global businesses face a number of constraints on the number of locations in which they decide to operate internationally. Challenges such as those related to networking and communication, socio-economic and political risks, differences in culture as well as unfamiliarity with the market all limit organizations’ capacity to operate effectively in the global marketplace (Czinkota et al., 2005). It is here that information systems have truly transformed global businesses. Researchers who highlighted the strategic importance of IS demonstrated the relationship between IS and business strategy and went on to state that information systems were necessary in achieving a competitive edge for the firm (Peppard & Ward, 2004) (Pearlson & Saunders, 2009). There have been various studies examining the relationship between successful firms and effective use of information systems. However, it is not clear whether these systems have a direct relation with the firm’s success or whether they are merely a part of a portfolio of resources that enables firms achieve competitive advantage. Furthermore, most companies have now started to outsource IS in their organizations. This handing over of IS to third parties in itself contradicts the view that IS serve a strategic function in organizations. Despite increased popularity of outsourcing of IS in organizations, the slogan of keeping IS intact with the