1. What are some of the forces driving IT organizations to globalize? There are many different reasons for companies to globalize. Companies that have presence all around the world need to fulfill the needs of their global customers, like banks for example. Other types of companies, like manufacturers of goods, want to expand their brands and make a bigger name for themselves in all the important markets. Especially young and new markets where there is great potential for expanding and growing, like in less developed countries.
Once you’re established in as a front runner in the new market, then you will have a certain edge against future competition. IT organizations naturally need to expand regularly in order to compete and increase their profits. Another big reason for globalizing is the opportunity to attract stronger and more efficient knowledge abroad, in the form av IT staff and resources, especially if it’s cheaper than in the country where the company is residing in. 2. What are some of the local forces and challenges facing modern IT organizations?
A big challenge is that the strategic motivation for globalization in an IT organization is not matched by operational approaches to meet enterprise needs. In order for globalization to be successful the IT strategy and the execution of it must go well together with the business strategy and goals of the enterprise. But this is a very difficult task to get right, especially among IT organizations, which are under constant pressure to innovate, deliver valuable output while also keeping down costs.
A big challenge is also the ability for IT to adapt to changes within the organization, to be able to keep up with the ever changing business environment of the world. If this feature isn’t up to par within the organization then it will fall behind its competitors, in terms of pure productivity and efficiency and finally in delivering value. Even though companies are going more global with its operations, it’s still as important to remind themselves to keep the attention equally as high on the local level of the organization.
3. How does a CIO manage the requirement to both globalize and localize the IT function? A CIO has the very challenging task of balancing the central and local control of operations within enterprises. There are two main focus points that a CIO must consider: Where exactly should IT processes be carried out and where should the key IT roles be positioned? The answers to these issues cannot be addressed through some common universal answer, because that’s not the way it works. The answers can be found through understanding each individual enterprise separate and adapting to its specific context.
To help the CIO with this big task, there are three healthy steps to follow, in order to ensure that IT-globalization decisions is aligning with the core business goals and needs of the enterprise. Determine the balance of global integration versus local responsiveness. Global integration results in lower enterprise costs and helps with management of risks for the company. Local responsiveness is the way for companies to interact faster, with more accuracy, with local economic conditions and partners. The CIO has the difficult task of maintaining a balance between these two needs.
Align IT’s major processes with the enterprise’s governance orientation The CIO have to consider the IT organizations major processes, like driving innovation, delivering business change and supporting infrastructure, in order to ensure IT-governance alignment. It’s very important for a business that its business orientation and goals are matched with the IT-governance orientation. Driving innovation means to guide the way the enterprise is utilizing its technology as well as integrating IT and business strategies.
The meaning of delivering business change is to implement new systems within the enterprise and fostering the change of the organization. Supplying and supporting IT infrastructure involves the task of installing and running software and hardware. These processes can all be handled at a global or local level. Assign staff, roles and competencies appropriately CIO has the responsibility of blurring the lines between central and local control within the organization, in order to unify the two for a much smoother running enterprise.
A company may make global business decisions centrally, but have to consider how to adapt locally to the demands of the area and region that the organization is residing in. In the end, the CIO needs to consider the the key business strategies within the organization and align them with the IT-function that the enterprise possesses. The key to success for the CIO is simply to match the structure of the organization, its technology and competitors etc with the goals and strategy of the business. This is extremely important, in order to evolve and grow in this modern and fast paced environment.