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Volume 25, No. 5

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June / July 1999

 

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Globalization and Information Technologies: New Emerging Partnerships


 by Irene Farkas-Conn

Economic reports are finally acknowledging that information technologies (IT) increase productivity.  Information professionals had known that this was bound to happen once companies reorganized, began to understand the information and IT and business relationship, which would enable them to take full advantage of IT capabilities.  Changes in doing business are heralded in a full-page ad in the New York Times. It describes dramatically how an Internet search, followed by a seemingly instantaneous bid, resulted in a two-hour engagement of a Mandarin Chinese translator "in some part of the world" to help deal with a Chinese business contact.

These are but a few signs of the way IT and globalized commerce are driving change.  Large companies are recasting their relationships with customers and suppliers.  Unexpected opportunities are opening up for small- and medium-sized companies (SMEs).

The three papers in this special section of the Bulletin of the American Society for Information Science were presented at the 1998 ASIS Annual Meeting. The sessions were organized by the Information for Industry Committee of the International Federation for Information and Documentation (FID/II),  which has been concerned with the management and information needs of SMEs. The sessions were co-sponsored by the ASIS Special Interest Groups on Management (SIG/MGT) and International Information Issues (SIG/III is one of the interests of FID/II).  

Interaction between large and small companies is shifting from EDI (electronic data interchange), initiated by large companies, to a symbiotic relationship among organizations. These changes affect information access, business practices and management. Large organizations can now provide services to SMEs they could not have offered before. SMEs are strengthened as a result. In a paradigm-breaking mode, institutions in both the private and public sectors are establishing new ways of working with diverse organizations.

In her paper "Expanding Partnerships for Small- and Medium-Sized Enterprises (SMEs): Needed: The Right Kind of Support," Marjorie Hlava, past president of ASIS and president of Access Innovations, Inc., a highly sophisticated information company, describes vividly the needs of small enterprises and some of the difficulties they have in obtaining the right kind of support.

Harmonization following acquisitions and mergers of companies is always difficult for the participants, but the managers of companies have at least an understanding of what to anticipate. But what works best in this new kind of symbiosis between large and small companies must still be explored. In her paper Irene Farkas-Conn, president of Arthur L. Conn & Associates, a management-consulting firm, and vice chairman, North America, of FID/II, uses the Harris/Bank of Montreal experience to show how large international banks are moving toward establishing strategic partnerships with SMEs.  They are going beyond expansion of financial services to small clients, becoming counselors to their small clients. Banks are now also offering personalized advice and links to other information that SMEs might need.

In the final article, the unforeseen results of a project of the Organization of American States (OAS) are described by Saul Hahn, coordinator, Basic Sciences and Networking, Office of Science and Technology, OAS.  The objective of OAS' Hemisphere Wide Inter-University Scientific and Technological Information Network (RedHUCyT) project was to connect member countries in Latin America and provide Internet access to their scientists at universities. The project was highly successful, introducing the Internet into Latin America and the Caribbean.

A significant though unplanned result of this university-based project was that small private sector companies became interested in communication technology. Private ISPs (information service providers) have been established; later arrangements were forged, joining private and public sector organizations and universities. As a result, direct connections exist within and among several Latin American countries that did not exist before.

Other papers were also presented at the sessions. Their authors were unable to provide written versions of their talks, but they are summarized here to provide a more comprehensive picture.

Trade associations emerged early as innovative information providers for SMEs. The early innovators were the associations that also counted very large companies among their members, such as the American Petroleum Institute (API) or the National Retail Federation. API was a pioneer. It established a network among its members before for-profit organizations could use the Internet. The trade associations were aware of the special needs of their member-community and, having brought in some outstanding IT managers, started to provide focused services.  Trade associations, among others, have been instrumental in linking members to legislative developments and providing instant access to news of interest. Since economic and other information of interest can be accessed through the Web, trade associations have made it possible for interested companies in different countries to keep track of developments in their industry and improve the environment for trading. Not only smaller companies but also the largest companies with their own extensive information services have been making use of these services.

In Chile, for instance, CONICYT, a semi-governmental organization has established a Web site for the mining industry under contract. In this stretched-out, narrow, mountainous country, where distribution of information has been seriously handicapped, this excellent Web site became a tool of communication for mining companies. They could find news and were linked to all the information of interest to the industry. Surprisingly, several Japanese companies, as well as some from the United States and Europe, have also regularly visited the Web site.

Outside influences bring unexpected changes. For instance, the mergers and acquisitions among information providers force global companies to re-think the way they acquire information, according to Irmgard Fischli, chairman of FID/II, head of library and information services, Novartis Services Inc., Switzerland.  The conglomeration of providers leads these companies to reconsider outsourcing of services and even modes of internal information support. The large customers must revise policies, establish new standards and requirements and enter into fresh negotiations with the changed information providers.

Finally, at the sessions, Maria Josť Brito, the Portuguese member of FID/II, deputy director, information, innovation to SMEs, PEDIP, Portugal, reported on the country's focused government effort to stabilize and strengthen SMEs and, through them, the national economy. PEDIP is the acronym for the Programme for the Development of Industry in Portugal, functioning under the Ministry of Economics. Portugal is a member of the European Union, and the focused effort of its government strengthened the economy of the country. Its GDP (Gross Domestic Product), whose main component is external commerce, increased in the past years. To move the country forward, in 1997, The Green Paper on the Information Society in Portugal was developed with the participation of every ministry. 

Brito, who is manager of PEDIP's aid programs for SMEs, with a view to their modernization and use of new technologies, described in some detail the extensive industrial policies of the country. Its government recognizes that private enterprises are the motor of the economy. It has planned its industrial policy to fit a framework of a market economy. To strengthen SMEs, however, limited public intervention to make up for the shortcomings of an imperfect market is part of the government's policy. The interventions are limited primarily to emergent industries, such as IT, where stronger strategic actions are necessary and, in a transitory manner, to support to industrial sectors in crisis. 

The government determined that SMEs, representing a significant part of the country's economy, must participate actively in the global commerce. The aid provided to SMEs allowed them to introduce new production technologies, new forms of management, organization, commercialization and marketing with the increasing use of IT. 

With the aid from PEDIP and consulting companies, an advanced information system for the footwear industry, SAIIC, was developed, involving all footwear and footwear-related companies. In addition to installations by the companies, a new system is integrated into a broader product developed on the national level.  SIGA, the Advanced Integrated Management and Communication System, installed and is testing and developing experimental modules of its management system, the electronic office system and the electronic and business EDI system.  Applications will be significant for all aspects of the industry from design through production, distribution, marketing and sales. As a result, companies in a traditional sector will have improved their internal organization and will communicate easier with their promoters, suppliers and customers. The transformation of a traditional sector of the Portuguese industry is a remarkable example of how the introduction of innovative information technologies, with judicious government support, enables worldwide cooperation between SMEs and their external partners.

We are at a threshold of major changes. New kinds of private-public sector alliances will be created. New possibilities are arising for SMEs. Partnerships between large and small companies are just evolving. There are many questions in the air: How will organizations function best in these new symbiotic relationships? What is the best use of human technical or financial resources? How best can we align strategy, processes and people? What is the real cost of the changed operations? It will take some time and experimentation before we have the answers


Irene Farkas-Conn is president of Arthur L. Conn & Associates, where she can be reached by mail at 1469 E. Park Place, Chicago, IL 60637-1825, by telephone at 773/667-1521 or by e-mail at farkas-conn@cwixmail.com.
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