Information technology and small-medium enterprise global expansion

Globalization

Information technology is a critical element of project management in today's globalized world. Dealing on the global stage requires supply chain solutions that span the entire world, locally-flexible marketing solutions and a refined understanding of the unique conditions of each market.

The cost of acquiring and managing the massive amounts of information needed to succeed in the global business environment have typically only been accessible to multinational corporations (MNCs), but increasing small- and medium-sized enterprises (SMEs) have leveraged information technology in order to compete globally. Even SMEs that do not wish to compete in other markets find themselves facing foreign competition as trade barriers fall.

In my thesis entitled Technological Globalization, I looked at some of the ways that information technology is transforming the global business environment, and how SMEs are increasingly gaining access to global trade the way that was once only the providence of multinationals. I noted four key propositions:

1) Increased availability of core business support helps lower barriers to global expansion for SMEs

2) The rise of third-party OEM manufacturing and crowdsource funding further lowers barriers to small company growth.

3) Increased available of IT support services reduces start-up costs for market entry

4) SMEs can go global with fewer levels of bureaucracy, giving them a competitive advantage over multinationals.

IT advances make it easier for SMEs to gather and process large amounts of data. This allows them to undertake meta-analysis from which they can determine trends and make better decisions faster.

Surprisingly, IT can also help SMEs with another key challenge of globalization -- finding the right person-system-organization fit. Culture clash is often a barrier to international expansion. Not only do information systems allow for greater operational flexibility to meet local market needs, but they also support a global managerial culture based on information and analysis. This does not change nearly as much from one country to the next as management that relies heavily on interpersonal relations. Companies emphasizing data and quantitative methods can bring together managers from all over the world more easily.

IT also helps tackle other logistical challenges of operating overseas, such as differences in legal environments and trade regulations. A centralized database of information can be developed that can be licensed to small businesses to manage the similarities between the laws of different nations. This allows for faster analysis of the economic implications of different alternatives. Want to know whether to sell to India or Brazil? IT makes it easy to crunch the numbers.

Lastly, IT provides better communications opportunities, which in turn makes managing remotely easier. Modern communications systems make it easy to keep in touch, and foreign operations can send operational data on a daily basis to headquarters, allowing for much better control than was traditionally possible. Furthermore, technology allows people to overcome time differences and assist with scheduling meetings even when virtual team members are scattered all over the world.