Analysis of Transnational IT Operations - Research Paper Example

1. Introduction The fast advancing technology has greatly facilitated communication, making national boundaries a mere formality in the larger interests of global economy. Traganou’s (2007) assertions that the global trend is increasingly moving towards transnational interests are significant primarily because he believes that immigration and emigration of people from one nation to another encourages them to adopt new values and ideologies. The advancing technology hugely facilitated the development processes of nations and increased their wealth manifold through cross-country strategic business partnerships. The environmental factors have significantly influenced the formation of a new political equation and intrinsically connected through the new age communication and interdependent market forces. Hamel and Prahalad assert that ‘corporate challenges come from analyzing competitors as well as from the foreseeable pattern of industry evolution ((189, p581). Hence, the organizations need to be flexible in their approach and adopt dynamic strategies which incorporate the changing equations of the global business environment. Indeed, in such a scenario of emerging new industrial paradigm, the strategic leadership initiatives of the firms in the area of IT become the major enabling factors of competitive advantage. 2. Role of IT in global business environment The advent of new technologies, especially that of computers, has changed the modus operandi of businesses and has helped improve its efficiency and prospects. The use of computers and information technology has helped the business houses to evolve new strategies and analytical packages that have improved their efficiency. Through the judicious use of technology within the business operations, the firms are creating have a definite and advantageous position within the industry. The firms are increasing using the information to analyze customers’ psychology through the evaluation and analysis of customer database which helps one to know the changing preferences of the customers in the rapidly changing times. Nargundkar and Srivastava assert that knowledge about customer and their required is considered to be critical for the long term success of a business (Nargundkar and Srivastava, 2002). Hence, analysis and identification of the changing trends of the customer requirements are important ingredients to gain leverage against their rivals. 3. Various factors and issues vis-à-vis IT operations 3.1 Internet ‘The Internet with its low-cost entry and ease of use quickly changed how information was exchanged and removed the distance barriers for business partners.’ (Gottardi et al. 2004). It has de-constructed the concept of geographical boundary for the businesses and has made it one of the most promising instruments of advancing one’s business base. Internet has increased the clientele of the business houses, while at the same time inundated them with a wide range of options and opportunities for expanding and promoting brands whose demands can be created in far flung areas. 3.2 Technology for improved communication Use of digital technologies like mobile phone, internet and computers together have greatly facilitated communication among various inter-related factors thus creating a wider database of new opportunities. ‘Access to information represents the basic precondition for success of a firm’ (Drucker, 1998). The comprehensive use of information technology in the businesses, have facilitated a better communication among the various economic units that work within the given parameters. 3.3 Globalization and e-Commerce Shultz say that it is the end-users who now control the markets rather than the marketers (Shultz, 2001). The e-commerce business activities provide the firms with the wide options to meet the challenges of the customers’ changing preferences and also expand their business across the globe through strategic partnership. The internet based sales and purchase system helps to develop not only database of customers but it also helps to generate huge information regarding manufacturers, dealers, retailers etc. Hence firms must realize the need for strategic partnership with global business entities to remain afloat in the highly competitive global business environment and look into the various proposals for partnership and strategic alliances with other companies. 3.4 IT planning and acquisition and SDLC IT planning and acquisition has increasingly become vital part of business strategy in the contemporary times. Software development life cycle (SDLC) and software acquisition life cycle (SALC) are integral part of development of effective information system. SDLC process is an integral part of management information system serving as the centralized monitoring system. SDLC helps coordinate and support the various functions and user requirements in order to help the organization to achieve all its strategic goals and objectives. It encompasses essential steps that identify the areas and after studying the feasibility of the project, help develop effective information system. 3.5 Increased need for B2B In the rapidly changing times, the firm must widen its market strategy to incorporate B2C business strategy also. B2C would open a huge customer base that it can address directly. The unlimited potential of the internet market must be tapped in order to remain afloat in the fast growing customer base. Hence, companies need to be more proactive in exploiting the potential of the emerging needs of the global market. 3.6 Technology as an integral part of CRM Customer relationship management is yet another vital people-centric business strategy that integrates technology and various business processes around the customers. Analysis and identification of the changing trends of the customer requirements have become important ingredients to gain leverage against one’s business rivals. The need for effective CRM strategy has therefore, become essential for improved business performance in the fast transforming socio-economical paradigms, so that they are able to meet the challenges of the external factors to maintain as well as increase their existing customer base. 3.7 Use of technology in HR Outsourcing for employees Digital technology, through outsourcing has given a unique opportunity to the companies and organizations to concentrate on their core mission thus widening the scope of research and advancement which is more creative and financially lucrative in the long run. It has precipitated the process of globalization and given a new meaning to the word which had hitherto included placement of human resource in multinational environment. Today one need not actually go to foreign soil to work but the reverse has become a virtual reality indeed! Foreign work place in domestic environment has become a reality through fast speed broadband. The whole process has greatly helped in developing mutual trust and understanding between the countries and hugely contributed towards job opportunities and employment across the globe. It has hugely facilitated recovery process in the current environment of recession. 3.8 Collaboration, partnership and licensing agreements Collaboration, partnership, licensing agreements and any other types of contract business relationship are the linkages that facilitate higher level of efficiency and organizational growth which would offset a competitive advantage over their rivals. Forging strategic business alliances and promoting networking with other business entities provide the firms with plethora of informed choices for improving and improvising their performance outcome. These linkages help provide the firms with wider database of knowledge and facilitate manipulation of strategic business information to improve the overall business prospects. 3.9 Diversity The social changes brought about by rapid globalization, have changed the socio- cultural values of a country, forcing them to formulate new strategies and policies to meet the challenges of the emerging pluralistic societies. The changing values necessitate development of a new social order which would not only embrace multi cultural values but help forge a universal bond that would transcend race and religious boundaries. The strategic alliances with other business partners irrespective of color, race, culture or nationality needs to be initiated and implemented within the work culture. 3.10 External environmental factors The non market factors have direct and indirect impact on the overall performance and operation of the firm. ‘These are characterised by 4Is: issues, institutions, interests and information’ (Baron, 1995, p2). The socio-political environment, role of government regulations and the legalities involved, play a very important part in establishing a firm specially if it is foreign company. The socio-religious culture of the community has strong impact on the attitude and consumer behaviour of the public, which has direct affect on economic transactions of the company. It is also important to take cognizance of the social values and customs while evolving one’s business strategy to succeed in foreign soil. Disadvantages The highly pertinent issues of data security and security of official information are important factors while outsourcing and working abroad. Confidential employees’ information and organizational information regarding its strategies and policies are sensitive information that must be well guarded to maintain competitive edge over the rivals. Another area that needs attention is the rules and regulations of the offshore outsourcing agencies. The virtual business is highly susceptible to intangible and unforeseen obstacles that may become highly inflammable if not tackled at the right time. The globalization has brought in a new dimension to business environment that fosters international laws and mutual agreement in clear cut terms with regard to the various aspects of disputes between business-partners spread across the globe. Conclusion Dennis et al., (2006) also affirm that firms are increasingly investing in new technology to gain leverage. It can therefore, be emphatically concluded that the digital technology has huge impact on the performance of a firm. IT skills have become intrinsic part of management strategy and entire workforce needs to include IS within its work culture. The changing times have made it imperative to meet the challenges of the contemporary lifestyle that demands more innovative approach based on the latest technology. (1550) Reference Baron, David E. (1995). Integrated Strategy: Market and Non Market components. California Management Review. 37(2). Dennis, A R., Valacich, J S., Fuller, M A. and C Schneider. (2006). Research Standards for promotion and tenure in information system. Management Information System Quarterly, 30,1, p1-13. Drucker, P.F. (1998). Next information revolution. Forbes, 24 August. Database: Academic Search Elite. Gottardi G., Bolisani, E. and M. Di Biagi. (2004) Electronic commerce and open communities: An assessment of Internet EDI. 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