Critical evaluation and integration of information systems

Citation

Irani, Z. (2002), "Critical evaluation and integration of information systems", Business Process Management Journal, Vol. 8 No. 4. https://doi.org/10.1108/bpmj.2002.15708daa.001

Critical evaluation and integration of information systems

Critical evaluation and integration of information systems

What's your problem? – It is only technology

Organizations often complain about the bewildering choices facing their selection of new technologies. Yet, the decision of whether to adopt new technology remains an important one, as many companies are increasingly being forced to develop new sub-systems that act as enterprise integration links, thus, bridging established systems (legacy) with new ones. The motivation for this would appear to be due to the ubiquitous nature of information systems (IS) and technological innovation, which as a result leaves many companies with the quandary of how best to evaluate the impact of their new systems and technologies on the organizational infrastructure.

Regardless of their business case, many companies continue to express concern surrounding their uncertainty about the best approach to use when it comes to evaluating systems and technologies, regardless of scope (as complete enterprise solutions or integration bridges). Yet, its importance (robust IS evaluation) remains high on management's agenda as the perils of developing islands of technologies through poorly evaluated technology remains in the mind of all too many organizations (often the legacy of previous failed implementations).

Although the benefits achievable following the deployment of new technologies are widely reported, it is increasingly recognized that these savings and benefits alone can no longer secure strategic competitive advantage. Clearly something else is needed to distinguish adopters of new technology from one another! In response, I believe that future success will lie in the differential between the approaches taken by companies to the evaluation, management and exploitation of human, organizational and technology based assets and infrastructure … but what does this translate into for management?

IS evaluation: a moving target

The role and scope of investment decision-making remains complicated and an ever changing one. The reason for this is that there has been a continuous expansion of boundary surrounding the evaluation domain. The change in such boundaries is in part attributed to new technology (increased scope, functionality and flexibility) and its impact (in human and organization terms) on developing a new organizational IS infrastructure, together with the many interacting socio-technical dimensions that support an organization. Hence, investment decision-makers not only need to have the skill to evaluate the nuts and bolts of the technology sought, but also need the foresight to assess its (technology) impact on the future of the organization and the people who rely on and use the system. Such impact may lie in term of the integration links with existing and future systems, benefit realization, stakeholder exploitation, cost (direct and indirect) management and risk minimization.

Industries' "roll-out" of information systems remains costly and difficult to implement, yet there has always been a rush to adopt the latest technology in hope of it solving most organizational problems – the panacea approach to management! This was clearly evident during the rush to adopt enterprise resource planning (ERP) as a means of addressing integration and system uniformity problems. Initially, ERP vendors promoted their enterprise systems as integrated suites (sets of modules) that cover more than 80 per cent of an organization's IT/IS requirement and business process. However, as systems (ERP) started to be deployed and problems emerged, it soon became evident that such packages (generic) do not always meet all the IT requirements of an organization. Hence, many companies attempted to parameterize their ERP packages to better support their idiosyncrasies. However, customization remained a difficult task, which caused numerous integration problems, as ERP systems are monolithic solutions that are complex, offer limited flexibility and often not designed to collaborate with other autonomous applications. The adoption of EPR proved further complicated by inadequacies in traditional evaluation processes, together with socio-technical investment-related barriers. Indeed, many of the problems identified above have motivated companies to search for alternative means of system integration, which in turn has resulted in the emergence of enterprise application integration (EAI).

In today's environment of electronic markets and business, EAI is being used to incorporate efficiently custom applications, packaged systems and e-business solutions into a flexible, manageable business infrastructure. Clearly, the impact of EAI is set to be far reaching, and can only be viewed in a positive light. Enterprise application integration addresses more effectively the need to integrate both intra and inter-organizational systems through incorporating functionality from disparate applications. It combines traditional integration technologies (e.g. database-oriented middleware, interface-based technologies, distributed object technologies etc.) with new application integration technologies (e.g. adapters, message brokers) to support the efficient incorporation of information systems into the business domain. In considering this, EAI results in supporting data, objects/components and business process incorporation.

In positioning the success of EAI within the information system evaluation arena, it is being seen by many as having a number of profound impacts on system development and design. Indeed, there is anecdotal evidence to suggest an increased trend towards incremental system development rather than software architects following traditional life cycle models, which have a definitive start and end point. Further motivation for incremental system development comes from advancements in new technologies that support system integration, such as software components that are motivating the reuse of software code. However, these issues have serious implications for software architects and decision-makers, as modern day information systems are being viewed as no longer having a definitive start and end, but instead being considered as evolving entities that grow and develop over time and in tune with the business environment. The result of this is that information systems are adopting a more organic living structure, which instigates inward looking changes (intra-organizational), as well as forcing the organizations to reacting to outward looking (inter-organizational) marketplace forces.

It can therefore be argued that the day of the static isolated information system is numbered, and is being replaced by a dynamic evolutionary information system structure, which is capable of integrating and sharing knowledge for the purpose of providing strategic, tactical and operational gain.

Investment decision-making

Conventional investment appraisal methods and techniques are mature and have their origins in the accounting discipline. However, these methods, simply do not work in today's sophisticated technology led environment. The reason for this is that traditional modes of investment appraisal are considered unable to capture many of the softer benefits that IT/IS brings. This is now widely acknowledged but nevertheless, there is little decision-makers can do to accommodate in financial terms the intangible dimensions of information systems.

Notwithstanding, the adoption of new technology remains a prime driver for organizations seeking to improve their short, medium and long-term performance. Yet, the adoption of all-embracing information systems that can be rolled-out and adequately integrate functionally isolated legacy systems often remains a management panacea that is rarely achieved due to many human and organization factors (readers are directed to the work of Irani and Love, 2001; Irani et al., 2001).

Much resistance towards the adoption of new technology can be attributed to the legacy of failed intra-organizational and inter-organizational information systems. Indeed, such failure is often evident through the inability of information systems to deliver the business benefits and saving that were used to justify their adoption. In addition, organizations are also beginning to recognize the plague of indirect costs associated with the adoption of information systems (readers are directed to the work of Irani et al., 1997, 1998); clearly, making many decision-makers retrospectively review past decisions now that a better understanding of information system costs is available.

Indeed, decision-makers and project managers once ignored none-financial costs, often for political reasons that centered on the need to secure management support for the investment. Consequently, indirect or hidden costs were dissolved by the project throughout the company or hidden and absorbed through overheads. However, increased accountability coupled with robust project management and, having learnt through previous investment decisions, have all placed information system cost identification, management and control on the agenda of managers.

It would therefore appear that the efficient and effective management (including identification and control) of technology-related costs and benefits are seen as enablers for strategic, tactical and operational business success. However, many companies continue to overlook the importance of evaluating their techno-centric investments and instead, favor a more ad hoc risky investment strategy that is often nothing more than an act of faith. Although, this approach is by no means a demonstration of robust management decision-making, my interpretation of the business sector's view is that unless practitioners are presented with all embracing techniques that support IS evaluation processes, they will be left with no choice but the status quo. Well, they might well have a long wait!

Zahir IraniEuropean Editor of BPMJBrunel University, UKZahir.Irani@Brunel.ac.ukhttp://www.brunel.ac.uk/~csstzni

ReferencesIrani, Z. and Love, P.E.D. (2001), "The propagation of technology management taxonomies for evaluating investments in information systems", Journal of Management Information System, Vol. 17 No. 3, pp. 161-77.Irani, Z., Ezingeard, J.-N. and Grieve, R.J. (1997), "Integrating the costs of an IT/IS infrastructure into the investment decision making process", Technovation, Vol. 17 No. 11/12, pp. 695-706.Irani, Z., Ezingeard, J.-N. and Grieve, R.J. (1998), "Costing the true costs of IT/IS investments: a focus during management decision making", The Journal of Logistics and Information Management, Vol. 11 No. 1, pp. 38-43.Irani, Z., Sharif, A.M and Love, P.E.D. (2001), "Transforming failure into success through organizational learning: an analysis of a manufacturing information system", European Journal of Information Systems, Vol. 10 No. 1, pp. 55-66.