MIS 648 Lecture 11 1

MIS 648 Presentation Notes: Lecture 11

The Challenges of Developing Systems Internationally

MIS 648 Lecture 11 2

AGENDA

Introduction to the lecture Goal of the Lecture Challenges of International IT

Development Strategies for IT Development

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Basic Ideas

Developing global systems is risky There are solutions, but costly Managing global development teams is

risky Designing and operating global systems

are risky ventures Certain kinds of systems (ERP mostly)

are likely candidates with their own problems

MIS 648 Lecture 11 4

Basic Ideas

Developing global IS is difficult Strategies are needed to lower risk

(which is significant) Most of what we have to choose from is

modeled on existing development strategies

The basic domains of choice are core vs. periphery, custom vs. package and internal vs. external.

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Basic Ideas -2

Selection of strategy depends on four sets of characteristics:

Organizational System Core/Periphery match IS Department

What else other than the

weather could have an influence anyway?

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Global IS Development Strategies

Development with a multinational design team (MDT)

Parallel development (PD)Central development (CD)Core vs. local development (CL)Best-in-Firm Software adoption (BIF)Outsourced custom development (OD)Unmodified package software acquisition (UP)Modified package software acquisition (MP)*

* -- in practice all acquired packages are modified to some extent

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Why This List?

These eight “strategies” actually overlap significantly and do not include all possible “strategies”

Classification scheme is arbitrary, but useful Primary tensions affect strategic position of

organization Coherence of team and alignment with co. goals

are primary quality and cost factors

In fact, organizations evolve through these strategies over time anyway.

MIS 648 Lecture 11 8

Evolution of Global IT Development

Later, elements at the periphery

develop their own needs and

systems: PD

Later, the core and periphery compromise on

services implemented: CL

In the early corporate stages, all development

is handled centrally: CD

Next, the firm either

adopts best-in-

firm (BIF) or puts

together a multinational design

teamWhich is really just

another way of exercising core

control

MIS 648 Lecture 11 9

Evolution…ct’d Central development first; countered by Peripheral parallel development;

compromised by Core vs. local development; then negotiated

through either Best-in-firmor multinational design team But solution might best be brokered through

an outside outsourcer or by buying modifiable packages

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Categorizing and Selecting GIS Development Strategies

Domestic vs. International Team

Package vs. Custom ApproachInternal customizationExternal customization

Org’l CharacteristicsAttitudes, constraintsstructure

System CharacteristicsCommonality, size, technology appl’n type,criticality

HQ/Subs. DiffsTechnical, requmts,culture IS Dept. Char’stics

Maturity, staff skills

Global IS Development StrategiesSee previous list IS Success

Schedule, budget, user

Source: Akmanilgil&Palvia, “Strategies for Global Information Systems Development: A Critical Analysis”, 2002

MIS 648 Lecture 11 11

Risk Assessment

Risk = Σ (risk factors)

Risk Factor = Probability of harmful event *

Probability that event will cause harm *

Cost of harm.

Hurricane in South

Florida

Hurricane will destroy

our data center

Cost to us if data center is destroyed

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Risk Assessment

Risk Factor = Probability of harmful event *

Probability that event will cause harm *

Cost of harm.

Our exposure this year to this particular risk factor is the product of 0.5, 0.03 and $1,000,000, which is

$15,000. Hence we should spend up to $15,000 to counter or reduce this risk.

Note: These numbers and values are not static and may change abruptly or over time. All estimates are controversial and subject to debate.

Probability of

destructive hurricane in any year=0.5

Probability of our data

center being destroyed by hurricane =

0.03Cost to us if data center is destroyed = $1,000,000

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McFarlan’s Risk Analysis

Risk is due to three factors: Size of project, technology gap and project definition stability.

Global projects are all “large” Global projects are all subject to strong technology

strains thus increasing “gap” Global projects are generally fluid and have multiple

parties and interests and are subject to many stresses

Thus global project risk is always “High”.

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So What to Do?

If Risk is High, we need to counter one or all of the three risk factors:

P(harmful events) – managed via planning

P(harm from harmful events) – managed via toughening,skilling, control

Recovery costs – managed by contingency planning, redundancy, control

McFarlan describes these along two dimensions: integration and formalization

Know what might happen and its

causes

Take action to prevent harm from event or failure to

react appropriately

Have plans in place to repair

damage, recover operations

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Management Solutions (á la McFarlan)

Integration (implicit structure) Internal: team meetings, professional

leadership, mutual familiarity External: user leadership, user

communication and direction

Formalization (explicit structure) Planning: Formal planning methods Control: Status reviews, change

management, organizational learning

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Architectural Solutions: Global Software Teams

One implementation is to create global software teams that work using technology as an intermediary for collaboration.

These are a form of virtual teamwork Barkhi, Amiri and James investigated

factors that lead to successful virtual teams, teams without social presence

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The challenges

Coordination problems Free Riding Process losses Dysfunctions such as role overload, role

ambiguity and low individual commitment Trust is important to persuade individuals to

participate in risky activities where they see forces beyond their control (or rather can’t see forces and thus believe them to be beyond their control)

IT culture has characteristics that both enhance and

disable trust-building traits and

activities

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The Nature of Software Development

Unstructured Non-routine, individualistic, modularized Intangible Highly “equivocal” (confusing, multiple

meanings) Negotiated rather than blended

individual work

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The Nature of Communication Channels

Media Richness Theory (Daft & Lengel) Defined on the basis of feedback cues,

language variety and personal focus Rich channels reduce confusion Non-routine tasks require richness Unstructured tasks require flexible, agile

channel use, with high information content Intangibility requires richness of expression

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Hence…

P1 Software development team participants are more likely to collaborate with co-located members than remote members

P2 Software development team participants are more likely to break communication links with remote members than with co-located members.

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Coordination Needs

Coordination is critical in software development; otherwise there can be inconsistency due to divergence, causality violation and intention violation.

Coordination can be mechanistic (formal, centralized, controling) or organic (informal, decentralized, cooperative)

Thus CMC environment poses consistency challenges

Work executed at different sites is

likely to have different a lot of

variety

Lack of understanding what is causing what based on

messages.

Lack of understanding of what is intended based on what is

noticed.

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Hence…

P3 Software development team participants perceived more difficulty in coordinating their activities with remote members than co-located members.

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Life-Cycle Effects

Groups go through forming, storming, norming and performing stages.

Consensus is important for productivity Early and latest stages require rich

channels for the negotiation, without which there can be individualistic, un-trusting behavior.

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Group Life CycleG

roup

Eff

ectiv

enes

s

Time, Investment

Forming

Storming

Performing

Norming

Putting the group together, learning

about function

Adjusting to one another’s styles, determining diff’s

Developing agreed rules for process to

meet goals

Actually getting business done

effectively

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Hence…

P4 Participants are more likely to shift blame to their remote members than co-located members.

P5 But participants who work effectively with their remote members become satisfied with the work process

No surprise here!

Even less surprise

here!

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The Research

Teams of four students from two universities developed database applications and manuals (N=82; number of groups was unreported)

Groups either worked only F2F or F2F+remotely.

Research was “interpretive” and “qualitative”.

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“Results”

P1: supported by comments P2: supported by comments P3: supported by comments P4: supported by comments P5: supported by comments Additional insights: An intense need for

quick response, high-quality information, and valuable information.

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Recommendations

Use F2F early and late in the project Modularize, provide rapid feedback to prevent

dropping communication In addition, develop team leaders, structure

teams well, populate intelligently with knowledge of social norms and standards.

Undepersonalize through small teams, some F2F contact, be aware of social context.