Posts Tagged ‘business’

Transnational information technology – IT – and transnational corporations

Saturday, July 25th, 2009

Transnational is a term that has been around for a long period of time. Corporate society defines transnational as being registered to perform business functions in other countries in addition to the organization’s home country. Information technology views transnational as providing technology services in other countries for conducting business activities. However, the corporate and information technology views digress in regard to strategic planning.
Corporations will engage in transnational business for various reasons. Two reasons are legal and resource considerations. Legal considerations include tax advantages, legislation and trade agreements. Resource considerations include human and product. Here is an example.

Corporation “A” manufactures tires. Strategic planning indicated the price of rubber will increase over the next few years, thus placing a upward pressures on the cost-per-unit. By placing a factory in India, the tire company will be able to secure the rubber required for the product and also incur lower costs-of-labor. Procuring the human and material resources will offset the additional finished goods transportation, local labor taxes and tariff costs. So, by engaging in transnational corporate practices, the organization can maintain and potential increase profit margins.

Transnational information technology in regard to strategic planning is involuntary. Strategic planning indicates the organization requires specific software to perform enterprise resource planning (ERP). The organization purchases the software based upon price and organizational requirements. The software vendor may provide transnational resources and services. Here is an example.

Company “A” requires enterprise resource planning (ERP) software for continuing operations. The software provider presents a requirements list to the organization for deploying the software. The hardware and software may be distributed by a transnational company; however, the only concern of company “A” is that the software performs according to specifications.

I do not consider transnational outsourcing of information technology services as beneficial to strategic planning. Any manager who has actually researched transnational outsourcing of information technology understands it actually weakens the organizations ability to respond to emerging markets. Just speak to the numerous organizations who engaged in transnational IT outsourcing about the capital lost through the outsourcing project and moving the services back “in-house.”

Transnational corporations and information technology digress in regard to strategic planning. The digression is in regard to voluntary vs. involuntary actions. Corporations engage in transnational activities due to legal and resource considerations. Transnational information technology is due to vendor supply lines and software support. The ability to identify the digression between the two should be on every manager’s mind while engaging in strategic planning.
Mike Kniaziewicz, MIS

B2C and B2B Strategic Partnerships

Thursday, December 4th, 2008

Strategic partnerships are all around us. If one were to stretch a strategic partnership the overall business entity would be very close to a monopoly. Say you want to shore-up your supply chain, one aspect is to enter into a strategic partnership with those organizations that supply you with materials. On the other hand, a supplier would want to enter into a strategic partnership to supply components for a larger manufacturing organization.

In order for a strategic partnership to work, both parties need to derive benefit from the arrangement and the arrangement must be legal and ethical. The school yard bully and students would not be a strategic partnership. The school yard bully may offer students protection from other bullies in return for student tribute; however, the arrangement is not ethical.

We see some large organizations try to form strategic partnerships. Many of the partnerships are beneficial for all parties, like a telecommunication organization entering into a partnership with customers (signing customers to a contract for low service fees) and fiber optic cable makers (who are guaranteed to sell x amount of feet of cabling). Each party, telecommunication organization-to-fiber optic cable maker (b2b) and telecommunication organization-to-customer (b2c) derive benefits from the strategic partnership.

Another strategic partnership is market based. In order to sell product in another country organizations will enter into a strategic partnership with an organization already existing in the country. The benefit derived is that the product manufacturer has access to the market while the broker has access to the superior product the manufacturer is producing. The broker will also secure contracts in the country for the amount of product the manufacturer needs to produce and ship to the country.

Strategic partnerships are all around us and not necessarily bad. We need to examine strategic partnerships in order to understand why organizations increase sales and flourish while other organization do not flourish. An organization may have the best product; however, without strategic partnerships customers will never know about the product.


Mike Kniaziewicz, MIS