Investments In Information Systems Research Articles

Justifying the investment in information systems

Organizations invest heavily in information systems and technology because of various reasons. For the investment to be approved by the management of the organization, a business plan that justifies the investment should be executed. Traditionally, these investments were justified with easy-to-use financial techniques. Because of the strategic nature of modern information systems in organizations, the relevance of these traditional justification techniques is questioned. This research was undertaken to identify specific issues that contribute to the problem managers have in justifying the investment in information technology.

The fuzzy art of decision science

Over the past 20 years there has been massive investment in management information systems, data warehouses, enterprise resource planning systems and analysis technology. However, considering these massive changes, customer decisions are still made using similar techniques. Many customer decisions are made using sequential rules embedded within campaign management, collections, new business and other customer processing systems. But customer decisioning is not just an analytical process based on statistics, since it also requires the input of experts and knowledge about other factors that cannot always be based on past experience — for example, the future actions of competitors or changes in business priorities. However, many organisations have found that sequential rules are often difficult to maintain, since they require specialists who change and manage the code and consequently the systems do not always reflect the many different factors that should be considered in making a decision. This paper addresses the role of customer decision making in organisations and how technology supports this task. It examines whether decisioning technology has moved forward to take advantage of the massive quantities of data and enormous computing power now available, and whether a ‘fuzzy decisioning’ approach would provide better decisions in certain situations. A fuzzy decisioning approach would weight the significant factors in the decisioning process to make a particular outcome more likely. By contrast, a rule-based approach would split groups of customers into different populations based on a logical condition. After reading the paper, readers may also wish to reflect on whether customer decision making is actually a science or an art!

Editorial

Editorial

Information systems evaluation: navigating through the problem domain

Information systems (IS) make it possible to improve organizational efficiency and effectiveness, which can provide competitive advantage. There is, however, a great deal of difficulty reported in the normative literature when it comes to the evaluation of investments in IS, with companies often finding themselves unable to assess the full implications of their IS infrastructure. Although many of the savings resulting from IS are considered suitable for inclusion within traditional accountancy frameworks, it is the intangible and non-financial benefits, together with indirect project costs that complicate the justification process. In exploring this phenomenon, the paper reviews the normative literature in the area of IS evaluation, and then proposes a set of conjectures. These were tested within a case study to analyze the investment justification process of a manufacturing IS investment. The idiosyncrasies of the case study and problems experienced during its attempts to evaluate, implement, and realize the holistic implications of the IS investment are presented and critically analyzed. The paper concludes by identifying lessons learnt and thus, proposes a number of empirical findings for consideration by decision-makers during the investment evaluation process.

Real options analysis of the timing of IS investment decisions

Many information systems (IS) investments belong to a class of capital budgeting problem where there is an option: the investment may be made straight away or delayed for some period. A real options analysis could allow decision-makers to add value to these investment decisions by providing a framework that explicitly recognises uncertainty. This paper uses options pricing theory to determine the optimal timing of IS investments and to explore the effect of different investment review cycles. The findings provide support for the common industry practice of demanding short payback periods for IS investments.

SMEs: Aligning is and the Strategic Context

Based on multiple-case research, this paper develops a model of strategic information systems (IS) investment in small and medium-sized enterprises (SMEs). IS investment is modelled as a function of an SME's strategic context as defined by its strategic focus, i.e. cost reduction versus value added and its market positioning, i.e. few versus many customers. The paper first investigates the ways in which IS may add value to organizations. It then outlines the use of IS in SMEs. This is followed by an analysis of competitiveness in small businesses. The paper develops an analytical model, which is termed the focus-dominance model, analyses case studies of 27 firms and reports that IS investment is strongly influenced by an SME's strategic context. Four cases are presented in order to illustrate the four different IS profiles identified. Finally, the implications for theory and practice are discussed.

Designing Work Oriented Infrastructures

Healthcare is making huge investments in information systems like Picture Archiving and Communication Systems (PACS) and Radiological Information Systems (RIS). Implementing such systems in the hospitals has been problematic, the number of systems in regular use is low, and where the systems are in use the benefits gained are far below what has been expected. This paper analyzes and identifies a number of challenges one will be confronted with when implementing PACS and RIS. To deal with these problems it is suggested to consider them as ``i>work oriented infrastructures''. This term is supposed to draw our attention to the fact that these systems have the same general characteristics as traditional infrastructures at the same time as they are developed to support specific work tasks. These are, and should be, designed and implemented primarily by their users based on their actual use of the technology. Standards are equally important for both work oriented and other kinds of infrastructures. But in the first case, the standardization process is more of a ``cleaning up'' type which follows a period where the infrastructures have been changed in different ways in different regions or communities.

Implementing GPRA: Examining The Prospects For Performance Budgeting In The Federal Government

The Government Performance and Results Act (GPRA) is the latest in a series of attempts to introduce performance-based management and budgeting techniques at the federal level in the United States. In the past, these attempts largely failed due to administrative complexities, lack of investment in managerial, accounting, and information systems, and the absence of institutional incentives to promote gains in economic efficiency. Whereas we find the objectives of the GPRA laudable, we question whether this current incarnation of performance budgeting can succeed in transforming the traditional focus of federal budgeting from annual appropriations and obligations to multiyear outputs and outcomes.

Bridging the gap between the IS organization and the rest of the business: plotting a route

Abstract. Much of the research literature advocates a strong information system (IS) organization‐business relationship if the IS organization and, in particular, technology is to make a value‐added contribution to the business. Although research also highlights that in many organizations this relationship is poor, little guidance is provided as to how this ‘gap’ might be bridged. The research reported in this paper is a longitudinal study of three organizations that are actively seeking to bridge the gap, improve the relationship and consequently the value that they derive from their IS investments. A process model containing six stages, illustrating the route to creating high performance from IS, is constructed from cross‐case analysis of the collected data. The paper ends with conclusions and implications.

Diagnosing information systems success: importance–performance maps in the health club industry

There is now a growing global leisure industry that includes health, fitness, and sports clubs. Faced with increasing competition, organizations within this sector have turned to information systems (IS) as a means of obtaining competitive advantage. However, complaining of time shortages, lack of expertise, and a shortfall of perceived benefits, management often find conducting post-implementation evaluations of their IS investments problematic. Importance-performance (I–P) maps have been successfully applied in the marketing field for many years where they have been shown to be a simple and effective management tool. However, there is little reported use of I–P maps in the IS field, and this paper puts forward a case for using them in the diagnosis of IS success. This is illustrated in conjunction with an extension of DeLone and McLean’s IS success typology for the UK health club industry.

Implementasi System Informasi: Dari Resistensi, Rekayasa Bisnis, hingga Penciptaan Kemakmuran

It is hoped that by using information system (IS) or information technology (IT) business world will be able to take more and more benefits, and customers could be more satisfied. IT is not surprising, therefore, if the decision on information system investment becomes an integral part of the overall organization’s strategies. Yet, the success of IS development much depends on several factors such as the ability of management to identify the sources of and overcome change resistance. Satisfying customers is very promising effort: increase cash flow and profit. Yet, the result, mainly, depends on the management or researchers’ perception about satisfaction score, the costs should be incurred, and the management understanding about the concept and tools of IS. This paper will discuss about change resistance and alternative ways to overcome the problem, satisfaction trap, the important of cost reduction in IS implementation, and concept and tool to be understood by managers, especially the managers of service organizations. Keywords : change resistence, information system, customer satisfaction

Using XML for the exchange of updating information between geographical information systems

The growth of institutional investment in Geographic Information Systems (GISs) testifies to their increasing importance as analytical decision-making tools utilising highly specialised data. However, a simple system still does not exist for the easy and consistent integration of evolutions into GIS. At present institutions either retrieve the updates themselves, often failing entirely results in information loss and major inconsistencies or they purchase reference data sets from geographic information producers. The problems and expense associated with the integration of updates for geographic databases are well documented. However, it is the lack of choice available in the method of delivering these updates that results in inefficiency, as a whole new database is often delivered even when there is relatively little real change in its data. This paper details the implementation of a new solution for the exchange of updating information for geographical information systems. Developed at the COGIT laboratory of IGN (the French National Mapping Agency) it is based on XML (eXtensible Markup Language) and aims to providing users with structured and detailed information concerning evolutions in order to make their integration into systems easier and more consistent. We highlight the challenges and benefits involved in implementing this transfer method, such as the interoperability between GIS software and the problems of real time updating of databases within client/server architectures. This paper aims to demonstrate that the use of XML in data exchanges is likely to become commonplace between GISs, especially with the aid of Java technology and the web-based client/server data access. It may even be possible to supply consumers with adapted updates on demand and enable real time maintenance of databases to be carried out.

Outcomes and Benefit Modeling for Information Systems Investment

This paper discusses the importance of modeling in the planning and management of an information system. The paper specifically addresses three different levels of modeling, referred to as macro, meso, and micro models, and discusses some issues involved in quantifying the variables for the micro model. The paper indicates how these different types of business models may be used in the information systems environment.

The effect of strategic alignment on the use of IS-based resources for competitive advantage

Persuasive evidence has described the strategic use of information resources in organizations. As a result, IS researchers have sought empirically to link that use to improved organizational performance. However, this alignment-performance relationship has been difficult to confirm. The current study contributes by distinguishing the alignment of the information systems plan with the business plan (ISP–BP) and the reciprocal alignment (BP–ISP). The study used 107 matched pairs of IS executives and other senior executives. Analysis showed that for IS executives both ISP–BP and BP–ISP alignment predicted the use of IS-based resources for competitive advantage. However, for other senior executives, only ISP–BP alignment predicted it. Study results suggest both groups of subjects share an understanding of the role of ISP–BP in creating competitive advantage from their information systems investments. However, the lack of a shared understanding of BP–ISP alignment may prevent organizations from achieving that advantage.

Education, training and the development of healthcare informatics

Since the mid-1980s, there has been an enormous investment in information technology and information systems in the health sector. The return on this investment has been comparatively poor and many systems have failed to live up to their promise. A major cause of the poor performance is the lack of an equivalent investment in the education and training needed for all aspects of information systems development, implementation and operation. This paper considers the nature of healthcare information and traces the emergence of the discipline of healthcare informatics, a discipline which attempts to provide the necessary foundation for appropriate education and training in the use of information by healthcare professionals. The paper also discusses the content and delivery of healthcare informatics courses and the relationship between the academic and health-care sectors. Finally, it outlines the roles of international collaboration and professional recognition in advancing the field of healthcare informatics and its application to high-quality and cost-effective healthcare.

Resource constraints and information systems implementation in Singaporean small businesses

While the information systems (IS) literature has identified potential factors of IS implementation success, none has investigated the relative importance of these factors in the context of small businesses. Small businesses have very different characteristics from large businesses; notably, small businesses suffer from resource poverty. Without knowing the relative importance of key factors, small businesses may be expending their limited resources and energy on less important factors which have limited contribution to IS implementation success. This paper develops a resource-based model of IS implementation for small businesses based on Welsh and White's (Harv Bus Rev 59(4) (1981) 18–32) framework of resource constraints in small businesses and Attewell's (Organ Sci 3(1) (1992) 1–19) knowledge barrier theory. The model is then tested on a sample of 114 small businesses. The results show that small businesses with successful IS tend to have highly effective external experts, adequate IS investment, high users’ IS knowledge, high user involvement, and high CEO support. External expertise is the predominant key factor of IS implementation success in small businesses.

Whose job is it anyway?: organizational information competencies for value creation

Abstract.Research highlights that most business managers continue to be dissatisfied with the value they perceive they are deriving from their organization's information systems investments. On examining the literature, the dominant perspective is that creating value through information systems is primarily the responsibility of the IS function. Accordingly, to address this chronic malaise, attention generally focuses on the IS function with proposed prescriptions ranging from re‐skilling the IS professional through re‐engineering the IS function to the ultimate sanction of outsourcing. This paper examines the problem of value creation from IS investments from an organizational as opposed to an IS functional perspective. Drawing on resource‐based theory, the paper argues that the effective deployment and exploitation of information should be viewed as a ‘strategic asset’. To leverage value from IS, the paper proposes that organizations must recognize and develop information competencies and that the elements of these competencies are distributed throughout the organization and not solely resident in the IS function. Through a multimethodological approach these information competencies are identified and described. The resultant competencies are then studied in an organizational context. The paper ends by drawing conclusions and articulating further research directions and opportunities

Information systems investment within high‐growth medium‐sized enterprises

IS spending by high‐growth medium‐sized enterprises is at a significantly lower level than that for other companies. However, there was no set pattern or correlation that identified relatively high IS investment with high growth or vice versa. The future forecast for IS investment favours a modest increase in the one to three years planning horizon. Although, given that these are high‐growth companies growing at rates in excess of 15 per cent per annum, the modest increase could represent a real reduction unless the price of technology reduces at a significant rate. The most notable evaluation criteria were “to facilitate change” and “formal financial investment”, but these were closely followed by “act of faith” or “gut feel” approaches. When asked to identify preferred project options, in the past the clear choice of most was medium risk and medium pay off. In the future the preferred options support medium risk and high pay off.

Enhancing the financial performance of a health system laboratory network using an information system.

We describe the improvements created by successful implementation of a laboratory information system for a multi-institutional integrated delivery system, including an analysis of the financial results. Conditions at the outset of the project, methods of management and project design, selected aspects of services redesign and consolidation, integration of services among the sites and their effects on laboratory staff and productivity are illustrated. A method for and example of measuring the financial outcomes in the sense of quantifiable improvements in operating expenses and new revenue for a whole health system clinical laboratory computer system are discussed. In this health system, the measurable financial improvements facilitated by an information system were the ability to control operating expenses and to grow the hospital laboratory network through the development of an outreach program. With organizational commitment to process innovation and improvement, using team processes and customer-driven decision-making criteria, the financial performance of our consolidated laboratory network was enhanced substantially. A fully implemented laboratory information system is considered the major enabler of positive change when combined with a genuine commitment from all levels of staff and leadership. Over time, this system's financial return is several times that of the information system investment.

Quantifying the benefits of route reoptimisation under stochastic customer demands

Incorporating route reoptimisation in the management of vehicle routing operations under stochastic demands yields benefits such as lower transportation and inventory costs. Because an investment in advanced information systems is indispensable for route reoptimisation, a firm needs to estimate the likely magnitude of these benefits before making an investment decision. This study addresses this information needed by providing a framework to assess the benefits more completely than previous studies. The framework, which is the key contribution of the research, comprises a set of tractable models that together address the costs of both inventory and transportation. By accounting for key determinants of route reoptimisation's benefits, including, for example, the volatility of customer demands, the models are applicable to a broad range of vehicle routing scenarios.