Identifying Opportunities for Using ICT

Introduction

The reason for going ahead with a new information system (IS) development can come from many sources. A new business requirement may force an organization to develop a new IS. An existing IS may be coming to the end of its usefulness. The firm may decide to either update its existing system or develop a completely new system.

An organization may review its existing systems and discover that an existing system is not providing the up to date information that is required by the organization. Users within the organization may have new decisions to make and that may prompt the firm to implement a new IS. The organization may find itself under increased competition. It may feel that it has to develop a new IS to keep up with rival companies. Smaller firms have a similar range of problems but are not even able to call on experienced information systems (IS) staff to tailor their software and usually have to rely on off-the-shelf packages (Maguire et al 2007).

Figure 1.

A new technology may become available that puts pressure on the organization to update its existing technology platform. It is important that the organization does not rush into an information system development without careful planning. Too many organizations have implemented IS without considering the repercussions. This is an important issue even for small and medium-sized enterprises (Maguire & Magrys, 2001). Larger firms can spend billions of pounds (sterling) on new information systems. It is likely to be the biggest capital expenditure they undertake. They do this even though the measures for performance evaluation are rather underdeveloped (Tallon & Kraemer, 2007).

Is the quest for strategic business advantage through ICT no more than the emperor’s clothes? While the tailors assure us it is not, a growing body of research suggests that this may be the case. Equally worrying, some researchers say managers are finding it increasingly difficult to believe technology alone is a contributor to sustainable competitive advantage (Irani et al. 1999), These findings are echoed in a working paper from City University Business School which says that while users endorse the need for competitive advantage from their ICT systems they rarely adopt criteria to enable them to assess any advantages systems confer. A similar finding came from the Massachusetts Institute of Technology (MIT) research programme into the effects of ICT in the 1990s (Scott Morton, 1991). It found that information systems (IS) are easily copied by competitors and that changes in company structure rarely bring lasting benefits. One would imagine that over 15 years later we would have learned from previous mistakes.

At the same time writers are struggling to find excellent examples of highly successful ARE/ICT implementations which have made a dramatic difference to commercial organizations; systems installed at such organizations as Thomson Holidays, Dun & Bradstreet, and American Airlines (Turban et al 2004b).

The picture uncovered by these studies is one of a broad mass of users failing to secure significant commercial benefits through ICT investment and in many cases not even taking steps to determine whether such benefits have been gained, while continuing to pay lip service to the idea of competitive advantage. If these researchers are correct, and there is no reason to dispute the findings, IS departments must find some other basis for initiating further investment. At the very least, they must adopt some objective criteria for demonstrating that competitive advantage is capable of being secured by such investment (Chaffey and Wood, 2005).