Case: The Value of IS
1.According to Dr. McLean, how pervasive is spending and budgeting for Information Systems (IS) in the U.S.?
50% of all business capital are spent on information technology in the United States.
2. Why do you think he claims, no appreciable overall improvement in national productivity?
National productivity from all this money spent on IS are not really substantial enough
to call it a big improvements for firms.
3. What are the reasons for his claims of no value of IS?
The measurement of output is difficult, there is a lag for adapting to the new technologies, and not all companies are managed the same.
4. Why is it difficult to measure IS outputs for the service sector and end-users?
The measurement of inputs, processes and outputs in economic and quantitative terms has been the historic mainstay of data recording and reporting. Currently, budget reductions have and continue to create a competitive climate in which profits generally are being scrutinized and compared on the basis of fiscal and programmatic accountability.
The conditions pose a significant challenge to outcomes measurement. The challenges generally relate to there being no standard measures of profit benefits; inconsistencies in methods of record-keeping and reporting among nonprofits; and the absence of agreement on outcomes and their measurement (Richmond, 1999).
5. Why do you think management of IS has ANYTHING to do with measurable output and increased productivity?
The management of information systems is extremely important. You can have a great IS and not have great productivity if the management is not up to par.
6. Why is BPR mentioned as a necessary complement to IS implementations?
It combines a strategy of promoting business innovation with a strategy of making major improvements to business processes so that a company can become a much stronger and more successful competitor in the marketplace.
7. There are some areas of improvements recently. Precisely where are these improvements occurring, and how?
It achieves dramatic improvements in cost, quality, speed, cycle times, and service. This can be done by rethinking. The radical redesign of business processes can achieve improvements as well.
8. Describe at least one adequate measure of IS that meets the criteria of (a) Objective, (b) Comparable, (c) Obtainable, and (d) Valid.
Performance-based budgeting- service level agreements
Activity-based costing- cost recovery, pricing schemes
Options analysis- strategic options, corporate goals
Economic value added- management value added
9. Based on the I/S Assessment Cube model, what is the minimum different measurements would you expect to develop in a mid-sized manufacturing firm? Why?
I would say around six. There are six different aspects to support the claim. First of all, you have to think about the customer and provider; the infrastructure and specific applications; then current operations and future development.
10. A. Choose one of the suggested measurement techniques,
- Come up with a measurement that fits it, and the criteria for measuring IS.
MEASUREMENT TECHNIQUE FITTING MEASUREMENT
Options analysis CORPORATE GOALS
