only are there issues as to where support staffs should be located (at each site or at a
regional center, or some combination of the two) but differences in language and cul-
ture complicate staffing and training. If the systems have been customized for coun-
try-specific requirements (either language or functionality), it places additional de-
mands on the support staff. Additionally, because of equipment availability, the
technology infrastructure used in each country may be different. This further compli-
cates support because it broadens the range of equipment with which the repair staff
needs to be familiar, and replacement parts may be difficult to obtain. One strategy
that can be followed is to outsource some support to local vendors with coordination
and oversight remaining as internal functions (see section 28.5(a)(iii), Outsourcing).
(iii) Factors Influencing Regulation. Domestic firms face one regulatory environment
while international companies face many. This is particularly the case with regard to
data privacy and Trans-Border Data Flow issues (TBDF) (see section 28.5).
(d) Types of International Business Activity. International firms differ in the com-
plexity of their business activities. The simplest is for a company to export products
to customers in foreign countries. While some new business activities may have to
be supported, such as customs clearance and international shipment, the demands
placed on a firm’s technology infrastructure by exporting goods are minor. When the
firm’s employees market and sellin each foreign country (direct sales) business ac-
tivities such as invoicing, sales support, inventory, accounts payable and receivable
all need to be supported. This can be done by capturing data in the foreign country
and transmitting it to a central location for processing or by processing the data lo-
cally in the host country. The choice between these two alternatives depends on how
restrictive the host country is to the transfer of data across its borders, how easily a
firm’s key operational systems can be modified to run in host countries, and issues
around timing, that is, when the results of the processing are needed.
Deciding to place direct productionfacilities in foreign countries increases the
technology support required. Now, in addition to marketing activities, all of the pro-
duction functions, such as production scheduling, manufacturing, bill of materials
processing, inventory, computer-aided design (CAD), and computer integrated man-
ufacturing (CIM) need to be supported. Because each of these systems tends to be
customized for a particular production facility containing specific equipment, it is im-
practical to run these systems on remote computers. A decision to produce in foreign
countries implies a localtechnology infrastructure and localsupport.
When a firm has fully autonomous subsidiaries in foreign countries with their own
presidents and boards of directors, they probably also have their own technology in-
frastructure. This implies a complete set of application systems and a complete tech-
nology infrastructure in each country. As a firm grows, competing in many markets
around the world, it will become increasingly attractive to coordinate activities glob-
ally in order to gain advantages of scale and scope. This requires that autonomous
technology infrastructures in each country be interconnected and that applications be
coordinated and shared. This places great demands on the planning and operation of
a firm’s technology.
(e) Differences between Service and Manufacturing. Services are becoming an in-
creasingly important part of the U.S. economy accounting for well over half of the
28.1 INTRODUCTION 28 • 5