Introduction to Business Information Systems
Supplementary Reading 8 of 8
A Path to CIO Success
Contributing to Strategic Success
Speaking to Components of Information Systems
• Purpose:
• What strategic purpose is served by this system? (strategic purpose = choice → extraordinary
value for attractive “customers” → competitive advantage + hard to imitate)
• What was Mordac’s purpose?
• People and Procedures:
• Who will use an IS to achieve its purpose?
• What will motivate them to do that?
• How will they know how?
• What else might they do (ask Mordac)?
• Information Technology and Data:
• What COMPUTER-BASED TOOLS work together to process what DATA to meet what
PURPOSE….these component Interact
• Complex interactions → Mordac’s surprise ← SYSTEMS
Effectiveness: to Refine User Needs Early & Meet Them
“An industry rule of thumb is that a bug which costs $1 to fix on the programmer’s desktop
costs $100 to fix once it is incorporated into a build and thousands of dollars if
it is identified only after the software has been deployed in the field”
The Economist, March 8th, 2008, p 20 of Technology Review.
The example says it is 15 x more expensive if found in testing
The Economist reports it gets very expensive if it isn’t found in testing
100 x more expensive if found after integration (the end of testing)
> 1000 x if found by the users after deployment (implementations)
Who finds information like this? Experts like Capers Jones…
Effectiveness: Beat these Odds
• “New IT Projects” (sample of 800 executives in many countries)
• All organizations have problems implementing new IT projects.
• Three problems stand out from the rest:
1. Over run on time (62%)
2. Budget overrun (49%)
3. Higher than expected maintenance costs (47%)
• 28% have experienced IT projects that have failed to perform against expectations
• 25% had business users reluctant to adopt new systems.
• 16% say new IT system implementation had negative impact on existing systems.
• 13% say a new IT system has not delivered the expected return on investment
Supply Chain Management Takes Awareness and Planning
• Ericsson retreated and Nokia advanced: Nokia anticipated problems in a plant in
Mexico after a fire
• Toyota was OK because it anticipated a supplier bankruptcy in Europe
• Parts shortages hurt:
• Sun in 2000
• Boeing in 1997
• Political wrangles tied up clothing shipments in European ports in 2005
• Information systems are essential
• Cisco: assembly problems in real time
• Be aware of speed, performance, customer needs, competition, and risks
ERP Risks: A Potential Fast Track Back to the Alignment Trap
• Business Process Investment Decisions become MIS Decisions
• MIS finds it easy to airlift SAP’s best team in from a competitors’ project
• Result: mediocre profits
• This is “Strategic Convergence” via implementation teams
• Information System project is managed as a an information Technology Project
• Strategic Purpose neglected
• People neglected
• Result: the thing you really need is not included (it’s unique and no one knows how to
do it), or
• Result: Nothing at all changes in the operations of the business
• Results: Litigation, Stagnation, Cynicism and other bad stuff
Disruptive Innovation Overview
• What Amazon’s approach to selling books, the processor inside the Personal Computer and
Google’s search methods have in common:
• They’re disruptive technologies (or uses of technology).
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Disruptive technology – a new way of doing things that initially does not meet the needs of existing customers
Sustaining technology – produces an improved product customers are eager to buy, such as a faster car or
larger hard drive
• The Innovator’s Dilemma – powerful forces keep established companies/existing market leaders
from seeing and exploiting opportunities
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Four “laws” of disruptive technologies
The difficulty of “seeing” new segments
• NB: High end (better mousetrap) innovations are easy to see, and usually fail because the
established companies will fight for the high end
• Overcoming the Innovator’s Dilemma
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There are some ideas that help
• Is it “New” or “Low End”?
• Does it have winning attributes?
• Can we embrace, extend, and if so, how and at what stage?
It’s worth the trouble