Information Technology Reference
In-Depth Information
multinational companies can establish close connections with their business partners and
roll out standard IS applications for all to use. However, those standard applications often
don't account for all the differences among business partners and employees operating in
other parts of the world. So, sometimes they require extensive and costly customization. For
example, even though English has become a standard business language among executives
and senior managers, many people within organizations do not speak English. As a result,
software might need to be designed with local language interfaces to ensure the successful
implementation of a new system. Customization might also be needed for date fields: The
U.S. date format is month/day/year, the European format is day/month/year, and Japan uses
year/month/day. Sometimes, users might also have to implement manual processes to over-
ride established formatting to enable systems to function correctly.
Disparities in Information System Infrastructure
The lack of a robust or a common information infrastructure can also create problems. The
U.S. telecommunications industry is highly competitive, with many options for high-quality
service at relatively low rates. Many other countries' telecommunications services are con-
trolled by a central government or operated as a monopoly, with no incentives to provide
fast and inexpensive customer service. For example, much of Latin America lags the rest of
the world in Internet usage, and online marketplaces are rare. This gap makes it difficult for
multinational companies to get online with their Latin American business partners. Even
something as mundane as the power plug on a piece of equipment built in one country might
not fit into the power socket of another country.
Varying Laws and Customs Rules
Numerous laws can affect the collection and dissemination of data. For example, labor laws
in some countries prohibit the recording of worker performance data. Also, some countries
have passed laws limiting the transborder flow of data linked to individuals. Specifically,
European Community Directive 95/96/EC of 1998 requires that any company doing
business within the borders of the 25 European Union member nations protect the privacy
of customers and employees. It bars the export of data to countries that do not have data-
protection standards comparable to the European Union's.
Trade custom rules between nations are international laws that set practices for two or
more nations' commercial transactions. They cover imports and exports and the systems and
procedures dealing with quotas, visas, entry documents, commercial invoices, foreign trade
zones, payment of duty and taxes, and many other related issues. For example, the North
American Free Trade Agreement (NAFTA) of 1994 created trade custom rules to address
the flow of goods throughout the North American continent. Most of these custom rules
and their changes over time create significant complications for people who must keep
enterprise systems consistent with the rules.
Multiple Currencies
The enterprise system of multinational companies must conduct transactions in multiple
currencies. To do so, a set of exchange rates is defined, and the information systems apply
these rates to translate from one currency to another. The systems must be current with
foreign currency exchange rates, handle reporting and other transactions such as cash receipts,
issue vendor payments and customer statements, record retail store payments, and generate
financial reports in the currency of choice.
ERP software vendors are working to help meet these challenges. For example, Brazil has
one of the strongest and fastest growing economies in Latin America. Many Brazilian orga-
nizations are implementing ERP systems to support and manage their operations. Brazil is a
very large country and has many unique tax requirements that must be met. The major ERP
vendors (SAP, Oracle, and Microsoft) are compliant with Brazilian tax laws and offer software
software, has hired Lionbridge Technologies, a provider of translation and localization ser-
vices, to translate its ERP software to English. It is also adding functionality to deal with U.S.
taxes, regulations, and business practices.
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