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MIST 5600 Test 2


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1. Discuss the factors that underlie the increased expansion of global software development.
Specialized talent, acquisitions, reduction in dev. Costs, reduction in time to market, collaborative ITs.
2. Discuss some decisions that organizations need to make when developing software for their global operations.
How and who should gather information requirements from subsidiaries?
How to get support from subsidiaries?
Who should build the system?
How to exploit existing applications?
What code should be common and what local?
How many versions of the code are needed?
3. What two dimensions define the possible range of options for global software development? (Offshore/onshore; insourced/outsourced)
Insourced(in-house) Vs Outsourced(another entity)
Onshore vs. Offshore

Onshore outsourcing ex: EDS
Offshore insourcing ex: GE, Intel
4. Discuss the four different methods of insourced global software development identifying their advantages and disadvantages.
Best in Firm: The best software that already exists anywhere in the company is selected to be implemented in all regions

adv= best practices
Disadv = gradual roll out, modifications may be necessary, same issues as an ERP

Example: FedEx found best in firm for their global system

Central Development: The system is developed at one site (predominantly the headquarters) and is installed at the subsidiaries
– Economies of scale
– Enforcement of SOP throughout company
– Better communication among parties
– Potential resistance by subsidiaries
– Unsatisfied requirements of some regions
– Diminished buy-in from uninvolved regions

Appropriate when requirements are very similar across the world

Multinational Design Team
A design team that is comprised of system and user personnel from multiple sites of the company is formed
The team members gather at one location for months to work on the design
– Participation creates design that meets requirements of all regions
– Increases likelihood of acceptance
– Adheres to international Standards
– Cost
– Right team leader and right team composition crucial

Parallel Development
Project is broken into multiple components and different components are designed and built at different locations
Requirements and construction performed locally. Connected through bridges or integrated
– Meets local requirements
– Time to develop
– Cost

2.5x more time to develop using parallel then central

Take time up front to figure out how everything will link together
5. What factors should one consider when deciding whether or not to outsource (as well as where to outsource)?
– Software development project:
• Project type (e.g., core?)
• Project structure
• Project size
• Technology to be used
• Etc.
– Home & host country factors:
• The availability / shortage of skilled IT professionals
• Wages of IT professionals
• Political & economic stability
• Infrastructure
• Exchange rate
• Language
• Etc.

Larger project size, more likely to outsource
Bleeding edge technology, should outsource
6. What is outsourcing?
IT outsourcing is usually defined as creating contracts with outside vendors to do a variety of IT jobs. These jobs can include data entry and operations, application maintenance and development, and disaster recovery, etc.
7. What is rural sourcing/farmsourcing?
Rural-sourcing = creating opportunities for work in the rural United States
Farmsourcing = focus on underdeveloped parts of countries⬦ outsource call centers to these areas
Ex: ecoStar Dish satellites in Bluefield, WV & El Paso, TX
8. What is near-shore sourcing?
Near-shore – outsourcing to neighbors… Canada, Mexico
9. What is offshore outsourcing?
Outsourcing to another country
10. What are the major forces behind the growth of offshore outsourcing?
– Globalization pressures – in order to stay competitive, organizations need to do more with less;
– Technology maturation & the Internet;
– Greater capabilities of offshore organizations
11. What are the risks of offshore outsourcing?
Cost-reduction Expectations
Data Security/protection
Process Discipline (CMM) (for organization not vendor)
Loss of Business Knowledge
Vendor Failure to Deliver
Scope Creep
Government Oversight/Regulations (Sarbanes-Oxley)
Turnover of Key Personnel
Knowledge Transfer
12. How do you mitigate some of these risks?
Make it part of vendor’s job to transfer knowledge back to company.
Pilot projects
Openly communicate sourcing strategy to all stakeholders
See answer to Stamm 3
13. What is the outsourcing life cycle model and what is its significance? (Note: I do not expect you to remember all activities – know the major phases. Know what it is, why it is important, how it can be used, and what are the consequences of not car
Major Phases:
1) Architect – foundation for outsourcing is laid
2) Engage - one or more suppliers are selected and deals is negotiated, collect and analyze info. So the decision makers can make informed decisions
3) Operate – deal put in place and operationalized and managed (hard to get out of, either runs smoothly or poorly depending on previous phases)
4) Regenerate – next gens. options are considered

The consequences of not carefully executing the activities in each phase can result in high costs later, excessive management time and effort, contract renegotiation, etc.
14. What are the three dimensions based on which we classify software exporting nations? (Carmel)
Maturity, Cluster of organizations, and Export Revenues
15. What are the major characteristics of each tier?
Maturity Cluster of organizations Export Revenues (US$)
Tier 1 > 15 years Hundreds > $1 billion
Tier 2 > 10 years 100 > $200 million
Tier 3 > 5 years Tens > $25 million
Tier 4 A few years A few organizations A few millions
16. What are each of India, Israel, and Ireland known for in terms of software exports? Russia?
– India in offshore programming

– Israel as an incubator of software products, security, etc.

– Ireland in application development, maintenance, call center, localization.

• Both Russia and China have exceptional pool of IT workers
• But maturity and size relatively low esp. quality management, software management, and marketing
• Both countries are likely to move to the first-tier by 2010
What are some success factors for national software exports? If I give you a case, be able to assess. (Carmel)
Linkages = language, timezones
Capital = attracting FDI
Quality of Life
Industry = what related industry is in place?
Government Vision and Policy
18. Describe the four stages of the offshore sourcing stage model (Carmel and Agarwal) and the characteristics of outsourcing arrangements at each stage.
- Stage 1 Offshore bystander = not outsourcing IT operations, a more domestic mindset, don’t want to export jobs abroad, inexperience with dealing with offshore partners
- Stage 2 Offshore experiment = offshoring non-IT projects as pilots
- Stage 3 Proactive cost focus = cost pressures to outsource, preferred partners
- Stage 4 Proactive Strategic focus = outsource not for costs, but for strategy – develop more innovative products
1. Why the emphasis on developing ICT capabilities in various nations? I.e., what is the significance of ICTs to national economic and social development?
• ICTs shrink space and time
• Enable better trading opportunities
• Reduce transaction costs
• Attract Foreign Direct Investment to developing economies
• ICTs are products that circulate throughout the world and bring together societies, countries, and organizations.
– Through the creation of networks of alliances that seek to capitalize on the perceived potential and the products of ICTs
2. We discussed four different, and very successful, strategies for the development of national ICT/e-business infrastructures (Singapore, Finland, India, and Ireland). Each is unique. Describe the strategy for each country and the confluence of factors
Singapore leveraged location / e-business hub for Asia B2B and B2C, expertise in international trade, sophisticated infrastructure
India leveraged people – English speaking highly educated, competitive costs, on time delivery, professional workforce
Ireland leveraged location & human talent – cultural and language ties to US, closeness to European market
Finland leveraged Nokia, University-corporation allegiance, High R&D intensity, tech know-how and innovation
3. Describe the Sarkar and El Sawy model of implementing a successful national ICT strategy and achieving sustainable competitive advantage.
Starts with E-business readiness, then you select an e-business related industry and start building an international competitiveness. (Build brand identity and critical mass)
Single most important factor is intellectual capital formation., national competitive advantage, attractiveness to global firms, and a national system of innovation in e-business activities. (Becoming a Tiger)
4. In light of this model, where is Egypt? What are they doing right? What are they doing wrong?
Egypt is in the 1st phase of this model, harnessing a distinctive e-business infrastructure. They have not currently selected an e-business related industry. Overall objectives not realized, but some success in implementing tangible national policies: 1) promotion of national demand for ICT usage, 2) Creation of exportable ICT industry, 3) dev. Of human resources in ICT, 4) encouragement of foreign investment in ICT.
5. What are some key lessons in terms of strategies for developing emerging economies via ICT?
Focus on development of long-term specialized capabilities rather than on short-term cost advantage.
- To adopt a particular e-business infrastructure strategy, emerging economies do not need high capabilities in all dimensions of e-business readiness.
- A high level of domestic technology adoption is not required for all strategies.
Focus on one or two things to excel at with your strategy
2. Discuss the different types of software piracy. Which ones are likely to grow? Why?
Specific Types
a. End User - using one license to install on multiple pcs, copying disks, upgrade offers when don’t have legal copy, academic software when not in academia, swapping disks
b. Client/Server Overuse – too many employees on network using central copy at same time
c. CD piracy/counterfeit – counterfeit cd-roms
d. Internet Piracy – websites, IRC, newsgroups, P2P
e. Hard Disk Loading – installation of system w/ apps not licensed

Internet is likely to grow, since it’s hard to regulate
3. Is software piracy a significant problem worldwide? Why? What is the economic impact of software piracy? Provide supporting evidence.
Of the new business software applications that were installed worldwide in 2003, more than one in three (36%) were pirated.
Of the $80 billion in software that was installed on PCs worldwide in 2003, only $51 billion was legally purchased.
4. Why are many developing countries high on software piracy? Why do we care?
Strength of intellectual property protection – Note that in many developing countries, the concept of software piracy has almost no traditional meaning since they produce little intellectual property themselves;
Software price relative to income;
Availability of pirated software;
Cultural differences.

Loss of profit ($29B)
5. What measures should be implemented to stop software piracy?
Civil and criminal enforcement, BSA, civil litigation, takedown of websites
TRIPS Agreement: Agreement on Trade-Related Aspects of Intellectual Property Rights
⬢ Ensure strong criminal penalties and procedures
o Damages
o Train courts, judges, and police
o Educate
6. What is the software piracy scene in Poland? What measures have been implemented to reduce piracy levels? Assess the effectiveness of the overall strategy implemented.
Their software piracy rates have decreased. They have been elevated to Priority Watch list, driven by music and movie area.
Govt’ has established enforcement committees aimed towards 1) cracking down piracy and bringing cases to litigation – and 2) educating people and businesses on property rights, and 3) educating the police.

BSA, FOTA for movie industry and ZPAV for the music industry

• Poland is still being far behind EU and most of EU candidates in terms of piracy level
• Progress in lowering piracy level in business
• Increase in the area of individual consumers Internet piracy level increase
• Low awareness of benefits from decreasing piracy
• Good law – weak execution
Mr. Stamm’s presentation on outsourcing:
1. What are the key reasons for outsourcing?

2. Key risks?
3. Key management initiatives to ensure successful outsourcing?
1) capacity (ex: Oracle programmers in India vs Oracle programmers in US)
2) cost advantage
3) quality advantage

Data security, knowledge loss (brain drain)

Appropriate knowledge transfer, manage relationships, have people visit home country to understand culture, everything is on table for outsourcing and consider “Why shouldn’t this be outsourced?” , don’t outsource core capabilities
1. What are the key challenges facing expatriates?
- no training opportunities (you’re an “expert”)
- high level of responsibilities
- cultural adjustment (mgmt styles)
- language barriers
1. What is the significance of using stage models as diagnostic tools in global implementations?
Maturation cycles, different countries, and different orgs. in each country are at different levels. Look at the level in the maturity cycle for any country you are trying to work with, and stage appropriate solutions for the level.


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