Why Business Digitalization Is Still So Risky: An Analysis of 54 Cases

Why Business Digitalization Is Still So Risky: An Analysis of 54 Cases

Myron Sheu (California State University, Dominguez Hills, USA) and Xin Xin He (Fairfield University, USA)
Copyright: © 2021 |Pages: 15
DOI: 10.4018/IJEIS.2021100101
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Abstract

Due to rapid IT advances and escalated globalization, business digitalization has been accelerating. However, the average success rate of such endevors remains low. As an attempt to reveal why the digital transformation of a business is still so risky, this research analyzes how commonly encountered risks in IS projects are responded to and how the responses affect project outcomes. Resulting from the authors' previous work, they hypothesize that information systems are much more complex as they play an increasingly pivotal role in executing most business functions, and subsequently, the risk pattern of IS projects may have evolved, and that as businesses keep adding more information systems to the enterprise infrastructure, rather than via a piecemeal approach, a framework for enterprise-wide digital integration must be established to guide and evaluate business digitalization. The finding from this research should largely validate their hypotheses and allow them to call for a refocus of the efforts on digitalizing an enterprise.
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Why Business Digitalization Is Still So Risky – An Analysis Of 54 Cases

Information technology (IT) has drastically advanced over the years and has enabled Corporate America to digitalize its operations and decision-making processes. However, information systems (IS) have also become increasingly complex and require IS projects to deal issues not only with software and hardware but also with data management, business processes, and functional users (Baccarini et al., 2004). After many years of research to improve managerial and technological methods for IS development, the success rate of IS development nevertheless continues to be much lower than other types of projects (Florentine, 2016). Amid this controversial situation, our research attempts to find out why digitalizing an enterprise is still so risky by examining the risks typically encountered during IS development and how IS projects perceive and respond to these risks. Our research method is an empirical study of 54 IS development cases and the resulting findings show some significant patterns that should be thought-invoking to industrial practitioners and academic researchers in the field of enterprise digitalization.

The rest of the paper is organized into five additional sections. Section 2 reviews the literature. Section 3 discusses how the cases are collected. Section 4 describes the data analysis. Section 5 gives some graphical presentations of the analysis to assist visualization. Section 6 draws some noteworthy implications and suggests the future direction of this research.

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