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Introduction
IS Appraisal
Research Methodology
Lessons learnt and OA Strategy
Framework
Case Study
Conclusion
References
1.0
Introduction
There is an ever-increasing demand for organisations to become more efficient and
effective.To assist with this process the importance of Information Systems (IS) is being
recognised. Organisations have been investing heavily in the deployment of IS to obtain
value and benefit. However, although IS expenditure is regarded as costly and risky
(Robson, 1997), many IS investments appear to go ahead without the use of formal
investment appraisal and risk management techniques (Ward, 1996). Often, the specification
and implementation is left to IS professionals only, with little or no involvement from
organisational management or the user community, which can lead to ineffective or failed
IS (Sauer, 1993). Earl (1996) has further suggested that if IS implementation is left to
IS professionals and users alone, then the investment is rarely recouped.
There is emerging a widespread and growing concern in organisations that IS investment
does not deliver value and that many projects do not meet business objectives (Fitzgerald,
1998). This issue is of major concern in the Local Authority described in this paper which
has the responsibility of delivering a wide range of services to local businesses,
organisations and the general public. The Authority has recently implemented an
organisational-wide Office Automation (OA) system to improve organisational efficiency.
However, how the value and benefit for the introduction of this system was defined and
measured, is unclear.
This paper investigates, via a case study using Grounded Theory (GT) analysis (Glaser
and Strauss, 1967), the rationale for the implementation of an organisational-wide,
corporate OA system and investigates and analyses how IS value and benefit was defined and
measured. The paper begins by considering the literature to obtain a perspective on both
IS investment and OA. This is followed by a discussion of the research methodology which
indicates how the local emergent theories about IS investment from the organisation were
derived. The case study is discussed in section 4 and is followed by a proposed strategy
framework derived from the empirical work and the available literature. Finally, a
reflective conclusion of the case study is presented to review and assess the argument for
formality in the IS appraisal situation.
The researchers are not concerned in this case study with the specifics of IS
assessment metrics such as detailed benefit measurement formulae, evaluation concepts or
cost benefit analysis techniques. The primary concern is high level; key strategic issues
that emerge from the case study which must be addressed to ensure the organisation obtains
maximum value from the implementation of new technology. Much of the current understanding
of these issues arises from the literature and this is given below.
2.0 IS Appraisal
The deployment of IS has been heralded as the solution to many organisational and
business problems. Proponents of IS often claim that the implementation of IS can resolve
many complex business problems and can deliver real competitive advantage and
organisational improvements (Hammer, 1990; Robson, 1997). Critical assessment of the
implementation of certain IS have clearly demonstrated that it is possible to solve
problems and yield competitive advantage (Porter and Miller, 1985; Ives and Feeny, 1990).
There are many well-documented examples, such as the analysis of the American Airlines
reservation system (Copeland and McKenny, 1988) and Xerox (Remenyi, 1991) to support this
argument. Throughout the nineties there have been increasing claims that it is possible to
radically change the way an organisation does business via the deployment of Strategic
Information Systems (SIS) (Hammer, 1990). These information systems intend to transform
the business processes of the organisation. SIS are usually corporate, in that they rely
on the strategic nature of data and communications to develop and improve efficiency,
effectiveness and competitive advantage and based on wide area networks. Hammer and Champy
(1993) contend that the potential benefits delivered by the strategic information system
can be enormous.
OA is a category of SIS and is defined as "the application of integrated computer,
communication and office product technologies and social science knowledge to support the
activities and functions in an office environment" (Hirschheim, 1997). OA data is
shared, text intensive, semi-structured, highly interactive and constantly changing. OA
systems that utilise this data facilitate the process of deliberation, debate, decision
support and worker co-ordination (Uhlig, Faber, Bair, 1995). OA is therefore an integrated
information resource system. The effective deployment of Office Automation (OA) systems is
an important element in establishing an electronic workplace environment and transforming
the capabilities of a modern organisation and its workforce (Popel, 1997) and (Galliers
and Baker, 1997). The introduction of Office Automation can empower users to streamline
business processes by communicating, sharing and adding value to business information
(Hirschheim, 1997). The focus of OA therefore, is the distributed workforce with its
primary emphasis being the work processes of the business, not the professional tasks of
individuals (Hirschheim). The main objective is to reduce administrative overheads and
establish an efficient and effective electronic workplace for information based businesses
and organisations.
Klein (1996) suggests that the future OA will be one of a continuing and expanding
domain.
It has been widely predicted that OA and emerging technologies will become a more
visible and important force in our office society of the future. The ability to apply OA
to a variety of tasks within the office will continue, with the resultant accelerated rate
of change in the development of office technology and systems (Lyytinen, Klein and
Hirschheim, 1996). It has also been suggested that OA will further expand so that
societies and organisations in the future will depend on global IS infrastructures. It is
proposed that groupware is the key to levering managerial and professionals knowledge, and
that telecommunication networks are creating virtual organisations, businesses, markets
and opportunities (Remenyi, Money and Twite, 1997). However, although it is claimed that
IS such as OA can transform an organisation, and indeed society, it is also claimed that
IS can deliver no benefit, and indeed dis-benefits, and actually put the organisation at a
disadvantage (Earl, 1996). Moreover, although computerisation has generally been welcomed
by most business participants, organisations and observers, there has always been a
certain amount of skepticism about its real benefits (Earl, 1996). Recent research
suggests that vendors, consultants and academics generally trend to exaggerate the ability
of IS to transform situations (Remenyi, Money and Twite, 1997).
Consequently, there is now growing concern, especially amongst top executives, about
the effusiveness of what has been traditionally regarded as an extremely high level of
investment and expenditure (Earl, 1996; Remenyi, Money and Twite, 1997). Many Chief
Executives are becoming more and more uncomfortable about the rate of IS spending and
increasingly frustrated by their inability to find appropriate measures with which to
evaluate its performance (Ward, 1996).
As IS expenditure is regarded as costly and risky, any investment in new technology
should be examined for its business value and benefit to the organisation (Galliers and
Baker, 1997). However, many IS investments appear to go ahead without the use of formal
investment appraisal and risk management techniques (Robson, 1997). Moreover, many have no
management process to govern and measure the achievement of the desired outcome and no
process to evaluate what benefits were actually achieved (Ward, 1996). This issue has
emerged primarily due to the increasing level of IS expenditure experienced by many
business and public sector organisations. There is now greater cynicism about IS benefits
that ever before (Remenyi, Money and Twite, 1997) note the following research findings:
- 70% of users declared that their systems were not returning their company's investment
(Romtech, 1989).
- IT overhead costs are consistently larger than anticipated (A.T. Kearney, 1987).
- Only 31% o companies report that the introduction of IT has been very successful
(Amdahl, 1988).
- Only 24% of companies claim an above average return on capital investment (Hochstrasser
and Griffiths, 1990).
- 20% of IS spend is wasted and 30-40% of IS projects realise no net benefits whatsoever,
however measured (Willcocks, 1991)."
Given the significant worldwide expenditure on IS/IT these findings are worrying.
Virtually every IS initiative has an associated cost, in terms of hardware, software,
staff and services. The above research indicates that there is a significant amount of
wastage from IS investment. Ward (1996) highlights that out of a random sample of twenty
organisations who were asked how they ensure that benefits claimed were realised, only one
could demonstrate a clear, documented process. Evaluation of IS investment therefore, is
an important issue in organisations, which is often overlooked.
Work to date suggests that successful implementation of SIS such as OA can offer
significant benefits to an organisation (Hirschheim, 1997). However, although there are
many claims for the benefits derived from the deployment of IS (Hammer, 1997; Robson
1997), there are seemingly equal number of claims of poor return of IS investment
(Wisemann, 1995). Until recently, little attention has been given to how the value and
benefit of IS defined and measured, especially within the public sector domain. There are
few formal IS appraisal frameworks to assist in the evaluation of IS deployment (Ward,
1996). There is clearly some doubt as to whether IS investments are delivering the
expected or achievable value and benefit. Given that very few organisations have any form
of process to overtly manage the delivery of value an benefit, it is difficult determine
whether they are achieving maximum value from the investment (Earl, 1996).
From the authors’ perspective, the implementation of a complex organisational-wide
OA system is both costly and risky, and significantly, may not yield any real benefit to
the organisation. This was the motivation to investigate this scenario but investigation
of value issues requires appropriate choice of research methodology and this is discussed
in the next section.
3.0 Research Methodology
OA and IS Value and Benefit have a 'soft' focus, in that it is unstructured and people
orientated. An intuitive, qualitative methodology was therefore chosen to obtain a valid
situation audit, which was based on components of Grounded Theory (Glaser and
Strauss, 1967). GT is an inductive, theory generation methodology that permits the
researcher to develop concepts, ideas and theories by grounding the observations in
qualitative data. Theory in this context is used in the sense that it refers to empirical
models devised on the basis of data.
- This approach was suited to the case study, which
involved informal semi-structured interviews with key staff, who were identified in
conjunction with the Chief Executive and the Authority's board of Directors. Interviewees
were encouraged to comment, and to raise, reveal and suggest issues and problems that they
regarded as important to IS investment and appraisal. The interviews were
subsequently transcribed and analysed using the GT methodology that enabled the
development of an account of the general features of the topic while simultaneously
grounding the account in empirical observations. The analysis involved identifying and
comparing categories from the transcripts and abstracting them to produce a 'rich'
prevailing view of the situation, together with emergent themes as described by the
interviewees. In addition, the approach collected empirical evidence, from other sources,
in relation to the case study. The main elements of the Methodology were therefore:
Interviewing Senior IT Officers and members of the Corporate Information Client Group
(CITCG) to understand how the OA facilities were initiated and to
ascertain how the value and benefit of OA was evaluated to ensure it met the needs of each
department's OA users;
- Interviewing a number of Directors and other senior staff within the Authority to elicit
their views of OA services currently provided. To identify their perceived value and
benefit of the OA solution and the extent to which it differed from those articulated by
the senior IT staff and the CITCG. To judge what senior officers and key users believed
'OA' actually was, and how this interfaced with other IT services available to them. To
identify what value and benefit individual Directorates needed from the implementation of
OA to fulfil their requirements covered by the Authority's Service Delivery Plans;
- Communicating with a small number of key OA suppliers to obtain guidance on and future
directions for OA products and services;
- Evaluating lessons learnt from Public Sector OA pilot studies run in the 1990's, which
are still, in the authors’ view, very relevant today;
- Reviewing published articles and academic research papers to identify attributes that
contribute to the success or otherwise of OA implementations.
In the following section the case or account is presented that was generated from the
use of the methodology
4.0 Case Study
The Authority has recently implemented an organisational-wide Office Automation system
to consolidate and integrate the many departmental systems, working environments and
business cultures. Prior to the implementation there was no corporate OA environment and
it was difficult to communicate and share information. It was perceived that this
situation was both inefficient and ineffective. The corporate OA system was therefore
introduced to deliver a coherent business information system on a single information
technology platform, across a large geographical area and several organisational sites.
This initiative had the key objectives to improve information flow, working arrangements
and organisational efficiency.
The choice of OA was seen as strategic, since the Corporate Information Technology
Client Group (CITCG) - a steering committee of senior representatives from each
Directorate and chaired by a user at Assistant Director level - set up in 1996, had
endorsed the choice suggested by the central IT department. There had been therefore,
seemingly, a well-planned and participative approach to its selection. The implementation
of OA should have resulted in a quantum difference to the organisational efficiency of the
local Authority and offer real benefits and advantages. However, the research highlighted
that there were fundamental OA user requirements identified that were not present in the
current package. There had been a small-scale requirements specification undertaken and
therefore opportunities had been missed to procure a product that would satisfy a wider
range of users and therefore be of more value to the Authority.
In addition, this OA service was not introduced through a positive commitment to OA by
the Authority in its entirety. Importantly, the Director's Management Team and many other
key users were not consulted. The CITCG had undertaken a review of IT services and simply
recommended a number of enhancements, including an OA service. These recommendations had
not been based on a formal feasibility study, nor had they been endorsed by the Chief
Executive and Director's Management Team. Put simply, as there was finance available in
the IT budget, the investment in the OA service was initiated and the Directors Management
Team were merely informed that an OA service was being commissioned. The important issue
seemed to be when Directors were to come online to the service, rather than any investment
appraisal. Significantly therefore, there had been no formal feasibility study, except for
a broad appraisal of functionality, and Directors Management Team had not underwritten the
decision to implement. Before any decision is contemplated regarding the procurement or
development of an information system, it is wise to invest resources in deciding whether
the proposed system can deliver what it promises and can be achieved within given
constraints.
OA had been made available to every staff member who had requested it and there had
been no requirement for a business justification to use the system. This was not seen as
problematical however, as interviewees were of the view that once the OA system and
licenses had been acquired that there were no additional costs. This is clearly not true,
as the intangible costs such as IT staff implementation costs, support costs, staff
training, increased network traffic and disk storage had been totally ignored. These
factors had major impact on the IT and client departmental resources. Indeed, there had
recently been a request for an increase in IT staff as a direct result of the
implementation of the OA system. Significantly, there had been no value or benefit
appraisal, except for a broad estimate of costs of OA. There was no management process in
place to govern the achievement of the desired outcome and no process to evaluate what
benefits were actually achieved. Any investment in new technology should be examined for
its business value and benefit to the organisation. The key issue with the measuring and
management of IS benefits is that of responsibility, which was often perceived as in the
domain of the Information Systems Department (ISD). Although the IS Directorate is
responsible for the procurement of the OA system, they should not be solely responsible
for justification or benefit evaluation.
The Authority's staff did not see OA integrated with their business processes or even
integral with other IT but as something else they could use. Adoption of OA facilities has
therefore been low with only Word Processing, some spreadsheet work, Time Manager, and
e-mail being seen as valuable. Business strategy and IS strategy must be integrated and
consequently OA implementation should be by application, or by business process (Ward,
1996). OA must therefore fully support current service delivery plans.
It also emerged that it will be necessary for OA and the associated infrastructure to
support any significant changes to the way in which the organisation undertakes its
responsibilities in future years. Perhaps most importantly, it has been identified that
service plans and OA capability must be considered together. Only then will OA reflect
real need whilst simultaneously shaping service provision. Significantly, however, there
had been no alignment or integration of IS (OA) strategy to business strategy. Business
strategy and IS strategy must be integrated to help ensure the success of OA
The case study established a perspective on the organisational culture of the
Authority. Many users were not consulted with regard to the selection and implementation
of OA, which had led to user frustration. There was no special support service provided
through the IT function. There is no doubt that better use could have been made of OA, had
there been a will by management to do so. Because it has been facility, rather than
business led, all support, other than the original training, has been reactive. This has
also had the result of creating a very high ratio of users to support staff. The IT
training element of the project was poorly identified, planned and delivered. Moreover, it
was recognised that inadequate training had in some instances led to limited success,
which had subsequently resulted in a poor return on investment. Users had cited anecdotal
examples of systems and procedures being virtually paper-based one day and computer-based
the next. They further maintained that generally, they had not received adequate and
timely training in the use of the new system. Managers stated that they had not got the
anticipated benefits from the introduction of OA. The IT help desk manager described the
frustration of having received many low level, rudimentary calls for assistance from
users. These calls had a significant impact upon the IT help desk resources and were
avoidable, in his view, if adequate IT training had been undertaken. Significantly, much
of the social aspects of IS had been overlooked. Consequently users had not been consulted
and had not received adequate training. The social perspective should be considered and
potential consequences minimised to ensure that the new technology meets user requirements
and gain user acceptance. There are many examples of systems which were introduced, only
to find that anticipated benefits were not realised because the social elements were not
fully considered (Sauer, 1993). The implementation of IS therefore, must be considered in
conjunction with an appropriate social culture, which should be present within an
organisation to support the both OA and business objectives.
There had been no evaluation of the OA service through a post implementation review
process. Consequently, no difficulties were formally documented and no subsequent
refinement of the OA service was identified or undertaken. Regular reports were not
compiled or presented to management team. The implementation and operation of the OA
system was not continually monitored and evaluated in terms of broad costs and accrued
benefits. Various reasons for not undertaking a post implementation review were offered by
interviewees, including it is not necessary, it is too difficult and it is too costly. One
interviewee admitted that the main reason was the ‘potential consequences’
if the results were poor. Significantly, formal post-implementation monitoring and
evaluation processes had been non existent. A post implementation monitoring, review and
evaluation process is an important factor with any new initiative and should form part of
the overall project plan of any IS implementation (Clare and Stuteley, 1995). This will
enable problems and issues to be formally documented, regular reports presented to
management team and remedial action taken where necessary. Unfortunately, this phase of OA
implementation had not been undertaken.
The development and use of OA within the Authority has been moderate. However, despite
the OA implementation being partly a disappointment, the overall analysis is that OA had
been actually well implemented and was well supported by IT staff. There were also many
positive aspects about OA, including the growing demand from knowledgeable, assertive and
well informed users. The case study enabled lessons to emerge and these are discussed in
the next section.
5.0
Lessons Learnt and OA Strategy
Framework
Using the GT methodology to analyse the interviews, categories were identified,
compared and abstracted to produce a rich view of the situation. This methodology,
together with the literature and the process of the researchers drawing upon their own
skills, knowledge and experience enabled certain success criteria to be identified from
the case study. These criteria form a proposal for best practice, which is discussed in
this section.
The case study suggests that a more systematic approach to the identification of
application functionality and benefits from the implementation of the new technology would
be helpful. This could take the form of a feasibility study which includes a cost /
benefit exercise to demonstrates that OA delivers value. Following these initial steps,
commitment must be obtained from top management. This supports the view of Remenyi, Money
and Twite (1997).
A centrally planned, generic OA strategy must be developed. The selection of OA
solution must be undertaken using the participative, holistic approach and all staff,
including senior management, must have ownership of the selected product. OA strategy must
be integrated with the overall IS strategy, which in turn is integrated with business
strategy. OA must therefore, be recognised as a business service, implemented to support
the Service Delivery Plans of the organisation and not just orientated to provision as
personal use for individual members of staff. This supports the view of Earl (1996).
OA support resources must be centralised, with the creation of a specialist team in
central IT with an adequate Research and Development budget. Formal OA education, support
and training of OA users should be continuously undertaken, which is orientated to OA and
to its use within a business context.
A post implementation monitoring, review and evaluation process must be undertaken to
ensure that implementation is successful and/or identify problem areas to enable remedial
action to be taken. This supports the view of Wisemann (1995) and Ward (1996).
The researcher would like to offer an additional approach, perhaps worthy of
consideration, which emerged during the case study. This is the notion of an organisation
having a benefits management approach to complement their systems development, project
management and implementation functions.
This would require the appointment of a specialist business project manager, with the
necessary skills to undertake rigorous feasibility studies. The role would best be
situated not in any functional department, but perhaps being independent and objective,
reporting directly to the Chief Executive of the organisation. The role of the business
project manager would be to improve the business relevance and delivery of systems.
Amongst the key responsibilities would be feasibility studies and the identification and
delivery of the costs, value and benefits. The duties may even include post implementation
reviews.
However, with the pressure on budgets and the emphasis headcount reduction, this may be
difficult to achieve. Perhaps this is an area where further research is necessary.
It could justifiably be argued that the lessons given above are equally applicable for
non-IT projects. However there are characteristics of IT projects that make the lessons
particularly relevant. Primary amongst these is the systemic nature of many IT projects.
That is to say that the impact of the development of IT projects often extends beyond the
perceived boundaries of the problem domain. This is particularly the case when IT systems
have a strong alignment to business objectives and a business strategy. In these cases, as
with the OA case described, a lack of understanding of the benefits that can be achieved
may lead to ineffective and inefficient use of the IT system to the detriment of business
goals. This may be compounded by a secondary characteristic which includes a lack of
understanding of the full functionality of the IT system and hence the possibility that
the system is under-used or worse, misused.
6.0 Conclusion
The greatest challenge facing the Authority will not be encouraging the use of IS or OA
nor to introduce the best software solutions. Rather the challenge is to ensure that an
appropriate strategy is followed with an internal support programme to manage the
anticipated increase in demand for IS facilities, and help educate staff in using these to
support the provision of the Service Delivery Plans. Most importantly, these factors
require planning, managing and monitoring to ensure the best use, value and benefit is
obtained from the investment in the technology to help ensure efficient, effective and
successful IS.
To be more effective in measuring and managing IS value and benefit it is necessary for
the organisation to change its attitudes towards IS investment. What is required is both a
strategic appreciation of the value of IS and detailed understanding of the resultant cost
base. IS investment must not be seen as being materially different to any other
investment. Decisions about IS share many characteristics with core business decisions and
often involve high risks, large sums of capital expenditure and high revenue streams.
Traditionally however, top management have ignored IS decisions a by delegating them to
specialist IS management, functional management or user groups. In an era when
organisations are critically affected by successful use of IS and when large costs are
involved, this is not acceptable.
Organisations generally, do not give sufficient senior management attention to the use
of IS. This is especially important for strategic and corporate applications. Furthermore,
many organisations do not educate IS management in core business and service delivery
issues. As a result, senior managers do not understand the issues inherent in IS
investment appraisals and IS staff feel unable, or unwilling, to offer sufficient
commitment to achieving benefit in core business and unable to identify real business
value in IS investment. Indeed, there seems to be a fuzziness as to who has the
responsibility of demonstrating and achieving Value and Benefit from IS investment.
It is very difficult to effectively employ IS in an organisation unless there is a
systematic approach to both IS investment justification and post implementation audits.
However, there are inherent difficulties associated with quantifying estimates and the
subsequent analysis, which are compounded by the fact that there is no one single metric.
To measure and manage IS value and benefits professionally is a complex, multi-faceted
and therefore difficult task. It is a subject which traditionally has not been given
significant attention, but which, with growing concern to both improve corporate
efficiency and effectiveness, and to control IT expenditure, will continue to attract a
growing level of interest and where clearly, further case study research is necessary.
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