Information Systems and Organizational Learning Strategic Management_3 potx

158 Strategic Information Management to the development of a sound technology infrastructure that will support business strategy and organizational goals. The appearance of this issue may have again been driven by strategic concerns. A lack of a coordinated strategy for technology infrastructure may have prevented companies from taking timely advantage of business opportunities as they emerged. • Rank 7. IS organization alignment. The organizational positioning of the IS department within the company has a direct impact on its effectiveness. In early days of computing, IS was relegated to Accounting or Personnel departments, and had the image of a service/overhead function. While that image has been mostly erased, there are still issues relating to its proper alignment. For those who view IS as a strategic function, the IS department has moved up in the organizational hierarchy. Large companies today have positions such as Chief Information Officer (CIO) and vice-president of information technology. Another issue relating to alignment is the question of centralized, decentralized, or distributed IS organization. Technology can effectively support any option; the key issue is that the IS organization should be consistent with the company organization and philosophy. • Rank 8. Competitive advantage. Information technology and information systems in a firm can be used in ways that provide a decided advantage over its competitors. Early examples of firms using IT in such manner include American Airlines, United Airlines, American Hospital Supply Co., and Merrill Lynch. The 1980s provided a major thrust for using information technology as a source of competitive advantage. This issue still ranks among senior IS executives as one of the top issues. Information systems dubbed as ‘strategic information systems’ are targeted towards customers, suppliers, or competitors, and are an essential part of a company’s competitive strategy. While targeting information systems at external entities is one source of competitive advantage, other sources include using IT for organizational redesign, improving organizational effectiveness, streamlining of business processes, and integration of business activities. • Rank 9. Software development. The development of software represents a major expenditure for the IS organization, yet it remains fraught with problems of poor quality, unmet needs, constant delays, and exceeded budgets. At the same time, the organization is presented with more options: in-house development, software packages, and outsourcing. Newer developments, e.g. software engineering methodologies, prototyping and CASE tools, promise to provide some much-needed help. However, organizations are further challenged as they have to constantly evaluate new technologies and development paradigms, such as distributed processing, visual languages and object oriented programming. For example, much of the new development is being done using the C++ or similar programming languages. Information Systems Plans in Context: A Global Perspective 159 • Rank 10. Telecommunication systems. Telecommunication systems provide the backbone for an organization to do business anywhere anytime, without being constrained by time or distance. While the earlier focus in telecommunication systems was on connecting users to a centralized mainframe computer, the renewed emphasis is on providing connectivity between different computing centers and users, who are widely dispersed geographically, and many times globally. Telecommunication networks also need to substantially multiply their bandwidth in order to carry all types of signals: data, graphics, voice, and video. Challenges that face the implementation of telecommunication systems include huge financial investments and lack of common industry standards. Yet, for those who have implemented backbone networks, the rewards have been tremendous. Other issues Issues ranked just below the top ten include understanding the role of IS, multi-vendor data interchange and integration, managing distributed systems, and planning and using CASE technology. It is apparent that these issues have a strategic orientation, and relate to planning and successful use of emerging technologies in the organization. Key MIS issues in newly industrialized nations Several countries have made rapid economic growth in just over a decade. These countries have emerged as the ‘newly industrialized countries’ (NICs) and are now beginning to prosper. While the precise categorization of any country into any class is somewhat contentious, and is also subject to movement over time, countries like Taiwan, Hong Kong, Ireland, South Korea, and Singapore fall into this group. The latest key issue results that are available from some of these countries are included in the chapter. Singapore issues were reported by Rao et al. (1987), Hong Kong issues by Burn et al. (1993), and Taiwan issues by Wang (1994) and Palvia and Wang (1995). The Singapore results are shown in Table 6.6, and Hong Kong results in Table 6.7. Once again, there is a certain degree of similarity between these country issues. We discuss only the Taiwan issues as representative of issues of newly industrialized countries, as it is the most recent study of all, and one of the authors was directly involved with it. Key issue ranks The key IS issues in Taiwan were obtained by conducting a survey of senior managers in Taiwan, who were well-versed in technology (Wang, 1994; Palvia and Wang, 1995). Responses were obtained from 297 managers on a 160 Strategic Information Management Table 6.6 Key issues in information systems management – Singapore (1987) Rank Description of the issue #1 Measuring and improving IS effectiveness #2 Facilitating and managing end-user computing #3 Keeping current with new technology and systems #4 Integrating OA, DP, and telecommunications #5 Training and educating DP personnel #6 Security and control #7 Disaster recovery program #8 Translating IT into competitive advantage #9 Having top management understand the needs and perspectives of MIS department (IS role and contribution) #10 Impact of new technology on people and their role in the company Source: Rao, K. V., Huff, F. P. and Davis, G. B. Critical issues in the management of information systems: a comparison of Singapore and the USA. Information Technology, 1:3, 1987, pp. 11–19. Table 6.7 Key issues in information systems management – Hong Kong (1989) Rank Description of the issue #1 Retaining, recruiting and training MIS/IT/DP personnel #2 Information systems/technology planning #3 Aligning MIS/DP organization #4 Systems reliability and availability #5 Utilization of data resources #6 Managing end-user/personal computing #7 Application software development #8 Information systems for competitive advantage #9 Telecommunications technology #10 Integrating of data processing, office automation, and telecommunications Tie Software quality assurance standards Source: Burn, J., Saxena, K. B. C., Ma, Louis and Cheung, Hin Keung. Critical issues of IS management in Hong Kong: a cultural comparison. Journal of Global Information Management, Vol. I, No.4, Fall 1993, pp. 28–37. Information Systems Plans in Context: A Global Perspective 161 7-point Likert scale on 30 issues. The majority of the respondents were IS executives. A wide range of organizations, both in terms of size and type of business, were represented in the study. The ranked list is provided in Table 6.8. Once again, we focus on the top ten issues. • Rank 1. Communication between IS department and end users. Com- munication between these two groups of people is necessary as one group is the user and the other the builder. End users in Taiwan seem to be unable to specify their information needs accurately to the IS group. They also have an unrealistic expectation of the computer’s capabilities and expect the IS staff to quickly automate all of their operations. At the same time, IS employees may lack a good understanding of the organization’s business processes, and use terminology that end users do not understand. The communication problem between the users and the Table 6.8 Key issues in information systems management – Taiwan (1994) Rank Description of the issue #1 Communication between the IS department and end users #2 Top management support #3 IS strategic planning #4 Competitive advantage #5 Goal alignment #6 Computerization of routine work #7 IT infrastructure #8 System integration #9 Software development productivity #10 System friendliness #11 Security and control #12 Software development quality Tie IS standards (tie) #14 Data resource #15 IS funding level #16 IS role and contribution #17 User participation #18 Recruit, train, and promote IS staff #19 Information architecture #20 Placement of IS department Source: Palvia, P. and Wang, Pien. An expanded global information technology issue model: an addition of newly industrialized countries. Journal of Information Technology Management, Vol. VI, No.2, 1995, pp. 29–39. 162 Strategic Information Management IS community is further aggravated due to the low level of communica- tion skills among IS graduates. • Rank 2. Top management support. Top management support is required as IS projects require major financial and human resources. They also may take long periods of time to complete. As such, the call for top management support is pervasive in the MIS literature. Taiwan is no exception. Top management support was found to be especially important in encouraging the use of microcomputers in Taiwan (Igbaria, 1992). Senior management is expected to demonstrate its support by both allocating a suitable budget for the IS department, and by showing leadership and involvement. At the same time, top management support will strengthen the IS department by helping acquire the support of other functional departments. Without strong top management endorsement and support, the IS department would have little chance to achieve its mission. • Rank 3. IS strategic planning. IS strategic planning in Taiwan is difficult due to rapid changes in technology, lack of familiarity with IS planning methodologies, inadequate understanding of business processes, short term orientation of firms, absence of successful domestic planning models, top management’s unwillingness to provide adequate funding to implement strategy, and lack of top management support for the planning process. Lack of appropriate strategic planning in other countries has had the effect of producing system failures and creating uncoordinated ‘islands of automation’. • Rank 4. Competitive advantage. In the private sector, several retail, wholesale, transportation, and media firms have begun to build informa- tion systems that can be utilized to make new inroads, create business opportunities, and enable an organization to differentiate itself in the marketplace. Even public organizations have made progress. Stories of how public organizations (e.g. a government-run hospital and the administrative office of a village) use IT to improve their administrative effectiveness and reduce the waiting time of clients, have been reported. The aggressive promotion of IT by the government has helped to raise further the IS practitioner’s consciousness of the competitive impacts of information technology. • Rank 5. Goal alignment. The needs and goals of the IS department can often be at odds with the organizational goals. A major incongruence results in potential conflicts and sub-optimization of IS resources. IS staff are often interested in developing large scale and technically advanced systems which may not meet the needs of the business and the end users. In order to assure goal alignment, senior management needs to clearly communicate the organization’s goals, policies, and strategies to the IS staff. In fact, a carefully crafted IS strategic planning process (issue #3) would facilitate goal alignment. Information Systems Plans in Context: A Global Perspective 163 • Rank 6. Computerization of routine work. In the USA, computerization of routine work (such as accounting functions and transaction processing) was the first priority and was done in the 1960s and 1970s. Even though Taiwan is classified as a newly industrialized country, the extent of computer usage in business is far behind that in USA. As a paradox, the production of IT products has had a striking growth in Taiwan, while the businesses themselves have been slow in adopting the technology. In a sense, the IS evolution in many organizations is still in Nolan’s initial stages (Nolan, 1979). For these organizations, automation of routine work (i.e. transaction processing systems) is evolving, yet critical. • Rank 7. IT infrastructure. In vibrant economies, a responsive IT infrastructure is vital to the flexibility and changing needs of a business organization. The technology infrastructure issue is exacerbated by a combination of evolving technology platforms, integration of custom- engineered and packaged application software, and the rigidity of existing applications. Many Taiwanese organizations are gradually realizing that building an infrastructure, which will support existing business applica- tions while remaining responsive to changes, is a key to long-term enterprise productivity. • Rank 8. System integration. Integration of various system components into a unified whole provides benefits of synergy, effectiveness, and added value to the user. Many IS managers in Taiwan are recognizing the need to integrate the ‘islands of automation’ (e.g. data processing, office automation, factory automation) into an integrated single entity. In the past, the execution of systems integration had encountered great difficulty due to lack of IS standards, insufficient technical ability, and inadequate coordination among functional departments. However, open systems, networks, client/server architecture, and standardization of IT products (promoted by the government) are expected to make systems integration easier in the future. • Rank 9. Software development productivity. Productivity is measured simply by the ratio of outputs to inputs. On both outputs, e.g. the quality and magnitude of software produced, and inputs, e.g. total time to complete a project and total person-hours, IS has had a dismal record. In interviews conducted during the research process, both IS professionals and end users complained that it takes excessively long to build and modify applications. The speed of development is not able to keep pace with changing business needs. Possible explanations and reasons that were stated include: insufficient technical skills, high IS staff turnover, lack of use of software productivity tools, and inadequate user participation. However, new software technology seems to offer hope, e.g. CASE tools, object oriented languages and visual program- ming languages. 164 Strategic Information Management • Rank 10. System friendliness. Ease of use and user-oriented features are essential to the success and continued use of a software product, as the popularity of graphical user interface (GUI) will testify. Unfriendly and difficult-to-use systems encounter strong resistance from end users at all managerial levels in Taiwan. The development of a friendlier interface is critical not only for the success of the software and hardware vendors, but also for the ultimate acceptance by the end user. Two reasons can be given for the significance of this issue in a non-advanced country. First, the users may be comparatively unfamiliar and untrained in the use of information technology. Second, a lot of software is imported from the advanced nations of the West and may not necessarily meet the human factor requirements of the host nation. Other issues Issues rated just below the top ten included: information security and control, and software development quality. As organizations in Taiwan increase the use of IT for business operations, there is a greater risk of disclosure, destruction, and contamination of data. The high turnover of IS professionals causes great concern for managers that proprietary information may be disclosed to competitors. Probable reasons associated with software quality problems include: lack of business process understanding and technical skills of the IS staff, high turnover among IS staff, and inadequate user participation. Issues rated at the bottom include: open systems, distributed systems, tele- communications, CASE, and expert systems. While these technologies have been introduced in Taiwan, their implementation is in a primitive stage. Also, end-user computing was rated low as it is not prevalent in the country. However, as employees and the general population acquire greater computer literacy, due partly to government efforts, this issue is expected to become more prominent. Key MIS issues in developing nations Countries which can be loosely described as developing countries include: Argentina, Brazil, India, and Mexico. These countries have been using information technology for a number of years, yet their level of IT sophistication and types of applications may be wanting in several respects. For example, La Rovere et al. (1996) report that Brazil faces several difficulties in network diffusion. Much of this is caused by lack of integrated policy towards informatics and telecommunication industries, and paucity of quality training programs. Similar obstacles are faced by many of the other Latin American countries. In Pakistan, Hassan (1994) describes environmen- tal and cultural constraints in utilizing information technologies. With the Information Systems Plans in Context: A Global Perspective 165 emergence of many eastern block countries out of closed and guarded environments, and the general trend towards globalization, information is now available about the IT readiness of these countries. Much of this information is derived from individual experiences, general observations, and case studies (e.g. Chepaitis, 1994; Goodman, 1991). Yet, many of them seem to face similar problems. Russia and other former Soviet Union countries defy a natural classification into any of our four classes. In fact, the World Bank places the former socialist countries in a distinctly separate category. In their commentary, Goodman and McHenry (1991) described two sectors of Soviet computing: the state sector which included development and deployment of a full range of highly sophisticated computers, and the mixed sector of private, state, foreign and black-market activities which were struggling in the sustained use of information technology. Roche (1992) and Roche et al. (1992) made similar observations. While giant centrally planned enterprises were created that emulated technological developments of the West, little computer equipment was either designed for or used by management and consumers. Thus, while Russia and former Soviet Union countries have made great strides in selected technological areas (e.g. the space program and aerospace industry) the general consumer sector and management have lagged behind significantly in IT utilization. As many reports would indicate, Russian IT issues are therefore characteristic of issues in developing countries. According to Chepaitis (1994), lack of adequate supply of quality information and poor information culture are IS issues reflective of Russia. A prioritized list of ranked issues based on a systematic study is available for India. We present these results as an example of issues from a developed country. Key issue ranks The key IS issues in India were obtained by Palvia and Palvia (1992) and were based on data collection from top-level and middle-level Indian managers. These managers either worked directly with computers and information systems, or had been exposed to them by other means. The issues were first generated using the nominal grouping technique and brainstorming, and were then ranked by participant managers in two seminars in India. A fully ranked list is provided in Table 6.9; the top issues are discussed below. The discussion draws primarily from Palvia and Palvia (1992) and Palvia et al. (1992). • Rank 1. Understanding and awareness of MIS contribution. An apprecia- tion of the benefits and potential applications of MIS is absolutely necessary for successful IT deployment. There is a general lack of 166 Strategic Information Management knowledge among Indian managers as to what management information systems can do for their business. The need for computer-based systems is neither a high priority nor widely recognized. Unless the potential contribution of MIS is clearly understood, advances in technological resources are not likely to be of much help. The lack of understanding is partly due to the traditional reliance on manual systems. The ready availability of a large number of semi-skilled and skilled personnel makes the operation of manual systems satisfactory, and prevents management from looking at superior alternatives. • Rank 2. Human resources and personnel for MIS. Higher national priorities and lower priorities assigned to IS development have caused the neglect of IS human resource development. India is somewhat of an enigma in this regard. In the last several years, India has become a primary location for international outsourcing contracts; yet there is a great demand and shortage within the country for those trained in developing business Table 6.9 Key issues in information systems management – India (1992) Rank Description of the issue #1 Understanding/awareness of MIS contribution #2 Human resources/personnel for MIS #3 Quality of input data #4 Educating senior managers about MIS #5 User friendliness of systems #6 Continuing training and education of MIS staff #7 Maintenance of software Tie Standards in hardware and software #9 Data security #10 Packaged applications software availability Tie Cultural and style barriers #12 Maintenance of hardware #13 Aligning MIS with organization #14 Need for external/environmental data #15 MIS productivity/effectiveness #16 Applications portfolio #17 Computer hardware #18 MIS strategic planning #19 Effect of political climate of country #20 Telecommunications Source: Palvia, P. and Palvia, S. MIS issues in India and a comparison with the United States: Technical Note. International Information Systems, Vol. I, No. 2, April 1992, pp. 100–110. Information Systems Plans in Context: A Global Perspective 167 information systems. While many universities and educational institutes are attempting to meet the burgeoning demand, some of these efforts may be misdirected from an IS point of view. The current emphasis on education seems to be on technological aspects rather than on the application of IS concepts to business needs. • Rank 3. Quality of input data. Information systems rely on accurate and reliable data. The age-old adage of GIGO (Garbage In Garbage Out) is well known in MIS, and directly impacts the quality of IS. This issue has also been seen in Russia (Chepaitis, 1994) and other developing countries. While not reported as a key issue in US studies, it appears that developing countries have inferior input data due to several reasons: lack of information literacy and information culture among workers as well as a less-than-adequate infrastructure for collecting data. Some managers reported experiences of excessive errors in data transcription as well as deliberate corruption of data. The underlying causes may be mistrust of and intimidation caused by computer processing, resulting in carelessness, apathy and sabotage. • Rank 4. Educating senior managers about MIS. This issue suggests a possible response to the top-ranked issue dealing with the lack of understanding and awareness of the role of MIS in organizations. It appears that senior managers do not truly understand the full potential of information technology. They need to be educated not so much about the technology per se, but more so about its many applications in business. For example, besides transaction processing, IT can be used for building executive information systems and strategic systems. Exposure to such possibilities by way of education and training can provide new and innovative ideas to managers to utilize IT fruitfully. In the authors’ opinion, any education must be supplemented with business cases and some hands-on training. • Rank 5. User friendliness of systems. The appearance of this issue in a developing nation may be attributed to several factors. First, the users in a developing nation are generally novices and untrained in the use of information technology; thus they may not be at ease with computer interfaces. Second, much of the software and systems are imported from Western and advanced nations. This software is geared to the needs of their people and may not be user-friendly in regard to the needs and cultural backgrounds of users in the importing nation. A hypothesis can be made that the ergonomic characteristics of an information system are at least partially dependent on the cultural and educational background of the people using them. • Rank 6. Continuing training and education of the MIS staff. The education issue comes up once again, this time in the context of MIS personnel. 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