Natalia Kolganova
AMN 195
Term project
November 25, 2007
External Forces
Influencing Computer
Information Systems
Introduction
According to Encyclopedia Britannica, information system is “an integrated set of
components for collecting, storing, processing, and communicating information. Business firms,
other organizations, and individuals in contemporary society rely on information systems to
manage their operations, compete in the marketplace, supply services, and augment personal
lives.” (Information system) It is a well known fact that we live in the era of Information
Revolution; the amount of the information produced by our society in the last five years exceeds
the amount of information generated during the entire history of human beings. Once the
information is generated, it has to be processes, organized, and stored in a proper way for its
further use, and computer information systems are in charge of the success of these processes.
Over the years, with the development of technology, the computer information systems
became very popular and, nowadays, are widely used by every organization, business, or
company. “These systems have quickened the pace of daily activities, affected the structure and
mix of organizations, changed the type of products bought, and influenced the nature of
work.”(Information system) The development of computer information systems (CIS) field has
opened a variety of opportunities for businesses using them, as well as businesses creating and
managing CIS. However, along with opportunities, CIS field faces problems of different kind as
a result of exposure to the external forces. As mentioned on the web site www.knowthis.com,
external forces are the factors that, being outside of the market’s control, play an important role
in how an industry conducts its business. (Managing) These forces are divided into five major
categories: political, legal/regulatory, socio/cultural, technological, and economic/competition.
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Economic/Competition
Before we go to the discussion of the economic conditions that influence CIS, I would
like to emphasize that the major factor that has a dramatic impact on CIS is globalization.
According to the article “Globalization and Global Software development”, “Globalization has
increased the connectivity and integration in the political, cultural, social, economic, and
technological systems between nations, corporations, households, and individuals. … In
particular, globalization has tremendously impacted the style of information systems
development.”
Globalization has change the entire concept of CIS development placing the third party
(client) between the major two parties – consumer and supplier. Before the businesses joined the
global market, the process of CIS development was managed by two parties (the consumer who
bought the product and the supplier who sold it). Now, the third party-client plays a connection
role between the supplier and the consumer. Client controls the consumer-supplier negotiation
process by gathering the information from the consumer, transmitting it to the supplier, and
delivering the finished CIS back to the consumer. This system also refers to offshore outsourcing
practice. “Outsourcing (offshoring) of software development is when a company procures
programming or other development processes from a supplier providing human resources that
are located in a foreign country.” (IT Outsourcing, 488)
The same article “Globalization and Global Software development” states numerous
advantages of this new system of CIS development. The most important one is that this system
allows cutting the labor costs by using the cheap labor in other countries. Taking into
consideration the global economic conditions, it is obvious that the process of CIS production is
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much cheaper in such countries as China or India than USA or Canada. According to the article
“Plugging into offshore outsourcing of software development: a multiple case study”, the cost if
CIS production in India may be 50-70% less that in the United States. That is why more and
more companies producing CIS enter the global marking changing their status from local to
international companies.
Conducting business on the global scale also allows hiring well qualified and skilled
employees. For example, India and Finland are famous for their excellent IT specialists.
“According to NASSCOM the total direct employment of IT professionals in India has grown
from 830,000 in 2003-2004 to well over one million in 2004-2005. The industry employee base
is estimated at nearly 1.3 million 2006. … India is the preferred destination of most firms,
including those from the OECD countries” (Plugging into offshore outscoring, 501).
The last but not least advantage of global CIS development is “the ability to use the time
zone difference to achieve “follow-the-sun” development. This can provide literally 24 hours a
day development which can lead to improved performance.” (Globalization, 288)
“Among all reasons to outsource, the one that has emerged as the prime reason in recent
years is to gain competitive advantage through partnership by sharing information and
knowledge.”(IT Outsourcing, 488) However, in spite of all the advantages, the practice of
outsourcing represents the major threat for the American employees – the jobs are being taken by
the employees from the other countries. According to NASSCOM, 142 of the Fortune 500
companies outsourced their software requirements to India in 1997. Moreover, “India’s exports
of computer software, IT services and electronics products are projected to grow by around 30 %
during 2007 to US $32 billion, according to Economic Times” (Plugging into offshore
outscoring, 501) The overview of different articles related to outsourcing leads to the conclusion
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that thousands of jobs in the field of information technology and, in particular, computer
information systems, are being outsourced every year, and the number keeps on rising
constantly.
However, the predictions of the US department of labor stay optimistic, and the
employment for all occupation in CIS sphere is expected to grow up to 38%. Here is some
statistics from the site www.careeronestop.ogr
Employment
Occupation
Computer and information scientists, research
Computer systems analysts
Network and computer systems administrators
Job
Percent
Openings
Change
1
2004
2014
United States
22,400
28,100
+ 26 %
830
New York
1,220
1,420
+ 17 %
30
United States
486,500 639,500
+ 31 %
20,800
New York
28,700
34,920
+ 22 %
950
United States
278,400 385,200
+ 38 %
13,770
New York
16,590
+ 31 %
700
21,720
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Political, Legal/Regulatory
The sphere of Computer Information Systems as any other field is operating under the
certain number of laws, rules, and regulation. As it was stated before, the process of
globalization have changed the entire concept of CIS, and the more the industry is developing the
more laws are being created. The majority of the rules in this field are related to the regulations
of the Internet activities (as more and more business operations are performed online) and
accessibility of the software. According to Dr. Karen Lynne-Daniels Ivy “There are seven major
parts of Internet law: 1) Copyright law, 2) Domain Names and Trademarks, 3) Patent Law, 4)
Privacy, 5) Free Speech and the First Amendment, 6) Contract Law and High Technology, and
7) Employment law.” (Internet Legal Rulings, 72)
According to encyclopedia Britannica, copyright is “the exclusive, legally secured right
to reproduce, distribute, and perform a literary, musical, dramatic, or artistic work.” (Copyright).
The main purpose of the copyright law is to protect the owner of the copyright from its
unauthorized use. Online systems are exposed to different kinds of vulnerabilities; therefore the
owners of e-businesses have to be aware about their ownership rights and potential threats. “The
U.S. Copyright Act says that an infringer of copyright is liable for 1) the copyright owner’s
actual damages and any additional profits of the infringer, or 2) “statutory damages” in an
amount ranging anywhere from $750 to $30,000 (or $150,000 if the infringement was “willful”)”
(Internet Legal Rulings, 72)
Domain name is basically a company’s web site’s IP address. The company usually
requests the domain name to be identical to the company’s name in order for consumers to easy
allocate the company in the World Wide Web. Trademark is “any visible sign or device used by
a business enterprise to identify its goods and distinguish them from those made or carried by
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others.” (Trademark) Trademarks, in comparison with copyrights that usually protect for 70
years, can last forever. Patents protect inventions for 20 years.
Oracle, the largest company in development of software for CIS has a whole section on
its web site dedicated to legal notices about their copyrights, logos, and trademarks. For example,
the part about the prohibited use states, “You may not use Oracle trademarks in a manner which
could cause confusion as to Oracle sponsorship, affiliation or endorsement.” (Third Party Usage)
The company is very concerned of its ownership rights and does everything possible to protect
them.
The privacy law is concerned of what type of information the companies can collect from
the consumers and how this information can be used. The large reliable companies disclose the
consumer privacy rights on their web sites thought it is not a governmental obligation. There is
“the Platform for Privacy Preference, commonly known as P3P, a technological approach to
interpreting and applying privacy policies” (Internet Legal Rulings, 73), and company has the
right to choose whether to follow it or not.
The example of the privacy policy from the Oracle web site:
Oracle Corporation and our subsidiaries and affiliates ("Oracle" or "we") respect your
preferences concerning the treatment of personal information that we may collect from
your use of the Oracle.com Web sites and your interactions with Oracle off-line. This
policy lets you know how we collect and use your personal information, and how you can
control its use. This policy describes the broadest potential use of personal information
throughout the Oracle.com Web sites and in off-line transactions. We may make far less
use of personal information than we have outlined in this policy.
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In the United States as in many other countries, the freedom of speech is very important.
The freedom of speech “means the right to be free from punishment by the government in
retaliation for at least some (probably most) speech. The First Amendment provides that U.S.
Congress shall make no law abridging the freedom of speech or of the press.” (Internet Legal
Rulings, 73) There is one great advantage that CIS and other companies conducting the business
through the Internet can acquire from this rule: they can freely transmit the information all over
the world.
Regarding contract laws, they came into existence with the development of online
communications and electronic contracts and signatures.
In 1999, the Uniform Electronic
Transaction act (UETA) was approved by the National Conference of Commissioners on
Uniform State Laws (NCCLUSL). The main idea of the UETA is that “record or signature may
not be denied legal effect or enforceability solely because it is in electronic form.” (Internet
Legal Rulings, 73) Another similar to UETA is E-Sign Act which became effective in October 1,
2000. “Under the E-Sign Act, assuming a contract meets other legal requirements, the electronic
signature is valid even if the parties negotiated and agreed to it via e-mail or on the Web.”
(Internet Legal Rulings, 73)
Besides these major laws and regulations, there are many other policies related to
accessibility of information. By accessibility it is meant “Successful access to information by
people with disabilities” (Oracle Accessibility Program) The Oracle web site provides a list of
these policies: State Accessibility Laws; eEurope 2002: Accessibility of Public Web Sites;
Federal Initiative Section 508; Web Accessibility Initiative; Web User Agent Guidelines; IBM's
Accessibility Guidelines; Java Accessibility Guidelines; Sun's Java Accessibility API.
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Socio/Cultural
Socio/cultural external forces include such factors as the demographic of population,
age, gender, ethnic groups, income level, etc. As was noticed before, job outsourcing is an
ongoing process in the sphere of CIS nowadays; therefore a certain number of issues may arise
due to cultural differences between the workers of the same company in different countries. The
most serious problem that the CIS specialists can face is difficulties in communication. “It is
common knowledge that lack of communication among developers is the root of failure in most
IS projects and large chunk of developers’ time is spent for communication.” (Globalization,
288)
As it is said in the article “Globalization and global software development”, the other
obstacle arises because of the differences in “attitudes towards authority, work ethic, sense of
time, and the styles of communication.” The author of the article provides vivid examples of
cultural differences between US and Asian countries.
For example, U.S. client companies normally prefer to specify every single detail items
on the document and use informal telephone and email contact. In contrast, Japanese
clients tend to prefer to use electronic media more formally and less frequently and also
have preference on verbal communication rather than written documents. It is also well
known that most Asian employees usually do not say “No” and do not raise the voice of
criticism in public meetings. Instead, Asian people usually say “I will see what I can do”
or “I will look at it later”.
One of the issues that cannot be left aside is the negative impact of outsourcing on the
CIS enrolment of student in US educational institutions. The main reason why it is happening is
because “freshmen students have very little knowledge about careers in information systems”
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(Developing a marketing strategy, 2). The main factors that influence students’ choice of the
major include personal interests and future salaries. The overview of the literature shows that
despite of the fact that we live in the era of technology, the students’ interest to IT is very low.
Regarding salaries, the situation looks pretty good. According to the US department of labor
statistics, the median annual salaries of CIS specialists are as follows:
Software publishers
$107,870
Computer systems design and related services
103,850
Management of companies and enterprises
99,880
Insurance carriers
97,900
Depository credit intermediation
86,450
The department also announces that
According to Robert Half International, a professional staffing and consulting services
firm, average starting salaries in 2005 for high-level information technology managers
ranged from $80,250 to $112,250. According to a 2005 survey by the National
Association of Colleges and Employers, starting salary offers for those with an MBA, a
technical undergraduate degree, and 1 year or less of experience averaged $52,300; for
those with a master’s degree in management information systems/business data
processing, the starting salary averaged $56,909.
It is obvious that the salaries in the sphere of CIS will not leave employees starving.
However, the earnings in some other occupations beat the impressive numbers of CIS specialists’
salaries; therefore, students prefer to choose such majors as accounting or finance.
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Technological
It is obvious that Computer Information Systems are all about technology. Any type of
technology that it is possible to imagine is used by companies in the sphere of CIS. Businesses
demand efficient software to organize and manage their business processes, and the companies
producing this software have to respond to this demand. For example, Oracle offers thousands of
products (software applications, databases, middleware) to the companies in a large variety of
industries such as banking, financial services, health, public sector, retail, etc.
Innovations are what keep the companies moving forward. With the technological
advancement and Internet development, more and more companies enter the sphere of ecommerce conducting their business online. Time has transformed huge slow computer machines
into tiny super fast mechanism allowing the CIS to be efficient as never before. The Internet in
its turn transforms the entire business world into one community.
The most significant issue is that Informational Revolution has changed completely the
process of communication. With the massive availably of such tools as “email, remote desktop,
web-interfaced web-demo, instant messaging (IM), file transfer protocol (ftp), remote login
through secure socket session (SSH), virtual private network (VPN), phone conferencing, and
video conferencing” (Globalization, 288) it becomes much easy for employees not only within
the company border, but all over the world to stay in constant contact.
According to the US department of Labor Statistics, the technological advancement has a
positive effect on demand in the labor force market. In particular, “With the explosive growth of
electronic commerce and the capacity of the Internet to create new relationships with customers,
the role of computer and information systems managers will continue to evolve.” (Computer and
Information Systems Managers)
Moreover, in order to stay competitive, companies will
continue to install complicated CIS and will need specialists to operate and maintain them.
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Conclusion
Computer Information Systems is a very broad field that as any other field is exposed to
the influence of internal and external forces. Internal forces are the factors that can be controlled
within the industry. External factors are those that can not be managed but have to be explored
because they play a vital role in the process of operation of any company. The industry has to
know the laws in the field, the economic conditions in the country, demographic trends, social
and cultural setting of its target market, and to be up to date in terms of technological
innovations.
In order to be successful, companies have to be proactive in responding to external forces
and take the actions to protect their interests. If a company or industry identifies that the effects
of any kind of external factors are positive, they support the ongoing process. In other case, if the
effects are negative, the companies have to find the way to prevent or eliminate, if possible, these
negative effects.
The most important factor that impacts the sphere of Computer Information Systems is
the process of globalization that has changed completely the settings of the industry. Outsourcing
the labor to other countries allows cutting the costs, hiring skilled specialists, and attracting new
customers. However, along with new opportunities, outsourcing brings some troubles as well.
The process of communication can suffer due to some cultural differences of the countries.
Adding a third party-client to process of negotiation between the buyer and the supplier may
create delays in delivering finished products to consumer and hurt the reputation of the supplier.
In order to provide a fare global market place certain laws, rules and regulations are
applied to the business processes conducting in the sphere of CIS. The main laws are about
accessibility issues and the ownership rights that protect the owner of a specific product or
invention from an unauthorized use of his property.
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Work Cited
1) Brown, Corrine M. “Developing a marketing strategy to increase enrollment.” Issues in
Information Systems VIII.2 (2007): 1-6.
2) Careeronestop. v.1.5.7.2007. 23 Nov. 2007 < http://www.careerinfonet.org>
3) Cho, Juyun. “Globalization and global software development.” Issues in Information
Systems VIII.2 (2007): 287-290.
4) “Computer and Information Systems Managers.” U.S. Department of Labor Bureau of Labor
Statistics. 4 Aug. 2006. 23 Nov. 2007. <http://www.bls.gov/oco/ocos258.htm>
5) "Copyright." Encyclopædia Britannica. 2007. Encyclopædia Britannica Online. 23 Nov. 2007
<http://search.eb.com/eb/article-9026218>.
6) "Information system." Encyclopædia Britannica. 2007. Encyclopædia Britannica Online. 23
Nov. 2007 <http://search.eb.com/eb/article-9126502>.
7) Ivy, Karen L.D. “Internet legal rulings: movement toward a consistent global legal ecommerce environment.” Issues in Information Systems VIII.2 (2007): 70-75.
8) “Managing External Forces.” Knowthis.com. 27 November 2007.
<http://www.knowthis.com/tutorials/principles-of-marketing/managing-externalforces.htm>
9) “Oracle Accessibility Program.” Oracle. 23 Nov. 2007
<http://www.oracle.com/accessibility/index.html>
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10) “Oracle Privacy Policy.” Oracle. 23 Nov. 2007. <http://www.oracle.com/html/privacy.html>
11) Sena, Mark P., Sena, James A., and Braun, Gerald. “Those who offshore and those who
don’t: a comparative examination of executive perspectives on it strategy.” Issues in
Information Systems VIII.2 (2007): 494-498.
12) Tafti, Mohammed H. A. “IT outsourcing: a knowledge-management perspective.” Issues in
Information Systems VIII.2 (2007): 488-493.
13) “Third
Party
Usage
Guidelines
for
Oracle
Logos.”
Oracle.
23
Nov.
2007.
<http://www.oracle.com/html/3party.html>
14) "Trademark." Encyclopædia Britannica. 2007. Encyclopædia Britannica Online. 23 Nov.
2007 <http://search.eb.com/eb/article-9073140>.
15) Yalaho, A. “Plugging into offshore outsourcing of software development: a multiple case
study.” Issues in Information Systems VIII.2 (2007): 499-515.
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