Evaluation Of Information Systems And Organizational Culture Information Technology Essay
Information systems are currently a crucial part of many organizations, helping companies manage their data and improve on efficiency thus enhance their productivity. However, in order for organizations to gain all the potential benefits of information systems, they need to conduct evaluations to determine the best system depending on the use within the company and the alignment of corporate goals. Evaluation ensure that the company is able to justify investment into developing new information system, improving an existing one, or changing the existing one to accommodate changing organizational needs. When considering the need and benefits attributed to evaluation, companies should consider the impact of organizational culture on the evaluation process and its overall effect on the choice of information systems. Notably, organizational culture is of significant impact to all organizational activities, influencing the relationships within the organization including that of the evaluation process.
In this study we are dealing with a description of information systems, types of information systems, uses, evaluation, and purpose of evaluation of information systems, benefits of evaluation, organizational culture, and effect of organizational culture on evaluation.
Information systems refer to a design in data processing involving people, data records, activities, software, and hardware within an organization and automated processes that are crucial to management as defined in Figure 1 (O’Brien 1999). Within organizations, information systems provide a system to organize and store data with an easy retrieval system. Information systems arose as part of management in the 1970s America, when universities began considering them a part of the social system, and as it began playing a significant role in business process. Today, many organizations are highly dependent on information systems whether from industries, commerce, or government, with many of the corporate activities linked to information systems (Peppard and Ward 2004). Information systems have become a significant resource in keeping organizations with a healthy position, which all managers should recognize.
Fig: 1(Source: O’Brien 1999)
Crucial to information systems, is the concept of information management that enables data gathering, and processing into useful information, and disseminating it to key stakeholders for decision-making, problem solving, and control in a timely fashion (Szymanski, Morris, and Pulschen 1991). The process of information management has three key elements namely people, data, and procedure, where people form the basic strength of the process, while data is significance in its accuracy to maintain correct decision-making. In its capacity in information management, information systems perform three basic functions beginning with accepting data, processing the information, and producing information to facilitate managerial decision-making (Szymanski, Morris, and Pulschen 1991).
Capabilities of Information Systems
Information system capabilities refer to aspects of information technology that an organization need to exploit to ensure successful management of information, and retaining competitive advantage made possible by the use of information systems (Davidrajuh 2008). Core information system capabilities according to Concord Associates (2002) include high-speed performance with high volumetric computations, providing of fast, accurate, and inexpensive communication within the organization, and offering easy access to information storage. In addition, information systems increases a company’s efficiency, safety and worker production, enables efficiency in information dissemination involving the company, provide an inexpensive model of organizing large amounts of data, and offers automated processes for company activities. Notably, an organization is effectively and efficiently able to accomplish the mentioned processes using less investment compared to the use of manual labor.
Information Systems Classification
Every company or organization should adopt an information system model that will meet the needs of management at various levels and promote organizational efficiency. One of the major information system classes is transaction-processing system that involves management of information pertaining to transaction bills, and stock ordering that shows accounts payable, and general design of order entry in accounts receivable (Szymanski, Morris, and Pulschen 1991). Another class is decision support system referring to an interactive based information system-involving semi structured or structured management problems. An additional form of information system is expert systems that imitate human experts on different fields using artificial intelligence programs to solve problems that originally require human expertise.
The fourth type of information system is executive support system that provides information to top management executives in a readily accessible and interactive format to facilitate decision-making and ensure the effectiveness of decision outcomes (Szymanski, Morris, and Pulschen 1991). The fifth type of information system is management information systems whose main purpose is to provide information to managers for use in problem detection and solution, thus creating a large-scale, coherent, and secure connectivity of information across all management levels (Wolstenholme, Handerson, and Gavin 1993). Another class is the office automation
system that provides individuals with an effective way to process personal and organizational data, perform calculations, and create documents that include presentations, spreadsheets, and personal calendars, thus enabling an increase in personal productivity and efficiency.
The Role of Information Systems
Information systems are a significant part of current organizational life in providing a system to collect, classify, and analyze data creating large-scale, coherent, and secure connectivity of information in the organization at all levels (Wolstenholme et al 1993). By principle, processes facilitated by information systems integrate information use with the organizational function enabling a support system for management, decision-making, and operation. The system uses computer hardware and software, manual procedures comprising of models for analysis planning, control, and decision-making and a database. The computer makes the concept of information systems viable hence their importance in every process of the integration of information systems to the organizational procedures.
As previously noted, key to information systems is information management systems in which the whole concept of information systems revolves and that shows the evidence of the feasibility of the system to a company. The construction of the information management systems undergoes a seven-stage framework beginning with study of the feasibility that shows whether it is necessary for the organization to implement an information system or change the existing work system (O’Brien 1999). The second stage is investigation and analysis of the current system, whereby the organizations assess the shortcomings and strengths of the current system then make decisions based on having a system that improves the shortfall.
The third step is specification of new information system, followed by design of information system and then coding of the system, whereby in these three steps the development team addresses questions dealing with acquiring and configurations of the system including necessary software, hardware, and other resources (O’Brien 1999). The sixth step involves the implementation of the finished information system of hardware, where the new system is made operational in the organization. The last step that is important in this study is review and maintenance of the information system, where the development team assesses the operation of the system, correct problems that may arise, and ensure the system delivers the anticipated benefits to the company.
When assessing the fundamental appropriateness of the information system, the manager or business professional need to concentrate on the framework issues that help define the role of the system that include foundation concept, business application, development process, management challenges, and information technologies. The foundational concept according to O’Brien (1999) refers to the basic behavior, technical skills needed, and managerial concept on the role of information systems. The second issue in the framework is business applications referring to the use of information systems in operation, management and complete advantage and decision making using the internet and intranet in the organization.
Third, manager need address the development process comprising of planning, development, and implementation changes to information system to meet the several strategy planning and application development approaches (O’Brien 1999). Further, a consideration of management challenges, which acknowledges the managerial challenges comprising of ethical and effective management, strategic and secure enterprise at the global level in information technology and systems found in the global e-business environment. Lastly, professionals should consider information technologies involving hardware, software, networks, data resources, and management technologies.
Information Systems Evaluation
One issue that management should always address in the case of information systems is maintaining an effective system noting that having a poor performing system is a inhibitor for good organizational performance, while an effective system enhances organizational performance. Therefore, every organization management should plan for and undertake an evaluation of the organization’s information management as a strategy to maintain continuous improvement of the information system and ensuring the organization takes full advantage of its ability to affect the overall organizational performance.
Evaluation refers to the assessment of the value of something or someone thus appraising its success and outcomes in meeting the reason for its existence. In relation to information systems, evaluation is the process of determining if, how, and why an information system contributes to organizational productivity (Miranda, Isaias, and Crisostom 2007). Organizations use evaluations as a decision-making model in learning about the starting assumptions, implementations, and outcomes of a project. More so, evaluation acts as a feedback system helping the organization learn and understand the factors leading to the success of innovative programs such as information systems.
When conducting evaluation of information systems it is important to consider the preconditions of the process proposed by Downey and Cox (2002) to include the purpose of the process, ensuring the process is understood by all concerned in the organization, ensuring full support of organization from all levels, and cultivating a sense of trust and confidentiality in the process. The successful implementation and sustainability of evaluation is highly dependent upon the full cooperation of various organizational sectors to ensure that the evaluation team accesses all the relevant information and the decision–making considers the full implications of the chosen method.
Evaluation may focus on various aspects of the organization, considering the different departments, their potential use of information systems. Furthermore, considering the organizational goals and their impact on the various sectors as well as aligning the development of information system to corporate goals. Evaluation provides the basic methods of any organization to determine whether current or upcoming information systems offer each department the necessary functions to promote organizational productivity, and assessing whether it facilitates managerial decision making thus the company efficiency.
Evaluation Models for Information Systems
The evaluation of information systems reduces the opportunities for failure of the system and information technologies in the organization; therefore, organizations seek to conduct evaluation to maintain success following either of two distinct models. The first group of evaluation models are ex-post evaluation and ex ante evaluation, while the second group includes strategic evaluation, summative evaluation, and formative evaluation. Management uses ex-post evaluation or analysts when considering financial implications of new implementation and is done before implementation of the project in the organization with the goal of discern the benefits the company will attain from the project and decide whether the organization is need of a new information system (Serafeimidis and Smithson 1999). If the analysts decide the company is not in need of the implementation, they will only need to make changes to the existing system and follow the same procedure in judging the system later. The ex-ante evaluation is used to make comparisons of an existing project with a proposed system in business-oriented organizations to enable managers make decisions concerning the efficacy of investing in a new system thus offering financial estimation.
In the second group of evaluation models, the first is strategic evaluation that refers to the evaluation of the system prior to implementation through assessing and comparing with other systems in order to judge whether the system will be beneficial to the organization against the estimated cost when comparing the investment and benefits. The formative evaluation model is utilized during system development to make critical decisions on areas to improve or changes needed (Gregory and Jackson 1991). The third model is summative evaluation conducted during implementation of the approved system or in post implementation stage. The summative evaluation model offers an analysis of cost benefit after a certain period to judge the usability and efficiency of the system.
Additional forms of information system evaluation include critical factor that access the need to develop and reflect the perspective of senior executives in information systems and value chain analysis that provides a study of activities critical to the organization and that will influence information systems development (Winklhofer 2002). Another method is the stages of growth approach that helps managers understand the position of the company in technology use and use these information systems. In addition, organization may use soft systems methodology of evaluation which is helpful in conducting inquiry ill-structured situations by providing general concepts and intellectual framework for articulating the search of reality images that enable relevant actions to solve the problem (Winklhofer 2002). These methods of evaluation enable organization align information systems and corporate goals, which is critical in ensuring organization success.
The Purpose of Evaluating Information Systems
The purpose of information systems evaluation is crucial in understanding the concept of evaluation as well as the benefits that the organization is likely to attain from conducting an evaluation. This is especially significant considering that for many organizations, investing in information systems or information technology translates into a large portion of capital expenditure; hence, the need to conduct an evaluation to justify the expenditure. The purpose of the information system evaluation is intertwined with various aspects of the organization such as cultural characteristics, subject of the evaluation, criteria used, process of evaluation, timing and tools applied(Serafeinmidis and Smithson 199). Therefore, the purpose of evaluation should consider the various organization and evaluation process aspects that have both an indirect and direct impact on the evaluation.
One of the purpose of conducting an evaluation of information systems is to define a method for controlling expenditure and risks during the development and use of the implemented system (Irani 2002: 11). Notably, the implementation and development of information system requires huge capital investments requiring that for the development to be approved, the group should have a system in place to control expenditure and ensure the implementation remains within the budget. Further, the development team should have in place mechanisms to ensure mitigation of arising risks during development and implementation to ensure the organization does not lose more than it is gaining from the implementation.
Secondly, Irani (2002: 11) promotes the argument that information system evaluation enables the team to rank information systems implementation and improvement according to the organizational priorities. This means that during development, implementation, or system improvement, the organization may be undergoing other pertinent tasks or projects that require capital and labor investment or that may undermine the process of information system development. In such a scenario, evaluation is crucial to ensure that the implementation is placed within the organizational calendar within a timeframe that other organizational aspects will not tremendously affect the process or negative impact the process.
In addition, evaluation of information systems enables the organization to compare the performance of different information system thus enabling the company to pick one that will provide the highest benefits depending on the organizational need (Irani 2002: 11). Different forms of information systems that include expert systems, management information systems, executive support systems, and decision support systems among others named in the research are available for organizations depending on the type and the need for the system. For example, organizations that require a system to facilitate managerial decision-making should adopt a system within the range of management information systems or executive support systems, which can efficiently perform the task. Conducting an evaluation would afford the company to assess the benefits and performance capabilities afforded by each system in the applicable range in order to choose the system that affords the best efficiency and performance in line with the corporate goals.
Another purpose of evaluation according to Irani (2002: 11) is to facilitate feedback on various information systems, which enables the evaluators to have feedback from the system users especially during evaluation of a system already in use that may need change or improvement. The importance of feedback is that it will justify the need to change an existing system to another that affords greater efficiency in performance or one that is more cost effective depending on the investment capability of the company. Furthermore, pursuing feedback enables the organization to determine areas of weaknesses in the current information systems.
Lastly, information systems evaluation enable the organization make decisions concerning investing in information systems (Irani 2002: 11). As previously mentioned, evaluation enables the development team justify the investment into the information system; therefore, the ability to make informed decisions is important, which is facilitated by having the necessary information made possible through evaluation. Conducting an evaluation enables the organization decide on the best form of investment in information systems.
The Benefits of Evaluation of Information Systems
Currently, information systems are a significant part of most organization, which would have problems in remain function if the system were to halt because of their dependability on the technology (Peppard and Ward 2004: 168). In conducting information systems evaluation, organizations are likely to reap different benefits ranging from tangible and intangible and ensure that the systems they largely depend on remain functional and relevant to maintain their operations. The tangible benefits ensure that the organization is able to increase profits while reducing running costs in the business thus maintaining a competitive advantage (Peppard and Ward 2004: 168). The intangible benefits include those that will enable the organization increase its efficiency and improve quality of the business although they may not increase the profit.
According to Peppard and Ward (2004) the tangible benefits resulting from information systems evaluation include increase in the organizational productive because of the organization being able to improve on its competitive advantage. Other tangible advantages include increases in employee output, improvement in company operation, and increase in company efficiency thus reducing running costs. In addition, evaluation will ensure the system brings about increased employee satisfaction that is seen in increased output, improvement of communication amongst all company components, and improve information management within the organization. Further, evaluation will bring about an alignment of the information system investment with the organizational strategy especially during implementation, and ensure that the information system is aligned to the corporate priorities to ensure a maximization of the benefits.
The evaluation of information systems has focused on ways that the organization can stimulate the tangible benefits thus reap more benefits from the implementation of information systems. Towards this model, evaluation had focused on a cost-benefit analysis that shows the economic feasibility of the implementation and work towards convincing the management of the need for investigating in changing, improving, or developing an entirely new information system(Cheung and Bagranoff 1991). The evaluation for tangible benefits has therefore focused on the economic feasibility discounting other strategic values of the investment, which in essence undervalues the system. For example, a cost-benefit model of evaluation will show that the information system will be beneficial in saving cost through work force reduction, which will help the company retain its competitive edge among rivals through the improvement of internal controls thus justify the required capital outline(Cheung and Bagranoff 1991). However, this leaves out intangible benefits that include increased stakeholder involvement in the company activities such as in decision-making, improved customer care, and increased employee satisfaction, and greater collaboration within the organization.
When considering intangible benefits will ensure that the organization is able to account for non-quantifiable pay-offs of the system, which may be more than the tangible benefits and later reflect in the quantifiable benefits (Cheung and Bagranoff 1991). Notably, intangible benefits such as improvements of strategic planning, may not be quantified in monetary terms. However, in the long-term it will create higher collaboration in the organization, increase employee satisfaction as other intangible benefits, which will create higher productivity forming a tangible outcome. Furthermore, intangible benefits such as higher active management will create a system that ensure a maximization of benefits because only the management can sustain the flexibilities needed in maintaining an effective system.
Additional intangible benefits of conducting an evaluation include maintaining profiles of information systems users, noting that in order to have a system that meets the organizational need the user profile must be considered, and secondly collection of task representation offering the needs and capabilities for every systems (Morse 2002). Further the evaluation is able to collect information on effectiveness, efficiency, and satisfaction derived from the information systems, which facilitate in decision-making especially when considering system upgrades.
Therefore, organization should ensure that evaluation also focus on intangible benefits instead of maintaining a focus on cost-benefits that are easier to quantify when proving the feasibility of the investment. Although not immediately quantifiable, intangible benefits ensure that the organization is able to maintain that will respond to changes within the organization and market, as well as focus on long-term benefits instead of the short-term. Notably, tangible benefits are more short-term oriented, while intangible benefits offer a long- term projection that may be more beneficial when proving the feasibility of the information systems for the organization.
One aspect that has substantial impact on the evaluation of information systems is the organizational culture. In the past two decades, organizational culture has become an important part of the organization gaining popularity as the concepts of competition, globalization, merging, and other workforce related concepts gains in importance in relation to product innovation, increase in productivity, and product quality (Hayland and Beckett, 2005). Organizational culture refers to a concrete way of thinking that takes into consideration the cultural and symbolic phenomena of a group of people involving rituals, myths, stories, legends, and the interpretation of events, ideas and experiences that influence and shape the group attributed with the culture (Alvesson, 2002: 3). Offering a more definitive definition is Black (2003) stating that organizational culture is the “specific collection of the values and norms that are shared by the employees in an organization and that control the way they interact with each other and with stakeholders outside the organization.” In addition, organizational culture involves the values and assumptions concerning social realities, meanings, and symbolism of the group.
Organizational culture may be divided into strong and weak cultures, whereby strong culture refers to one where the organization has cohesive values that the employees believe in, fosters trust and commitment, encourages the acceptance of company policy, and encourages higher service delivery to customers (Robbin, Odendal, and Roodt 2003: 4). On the other hand, a weak culture refers to one where the organization is ran through extensive procedures and bureaucracy to maintain control, little employee control, inconsistency in expectations, and presence of many subcultures among the various departments. Notably, the presence of a weak culture may substantially reduce the ability of the organization to meet its comparative advantage and ensure efficiency as well as productivity because of reduced collaboration.
According to Resnick (2007: 1485), a strong culture enhances collaboration amongst the organization stakeholders including employees and management, enhances the communication system between the stakeholders, and encourages the members to respond positively to rules and regulation because of greater cohesiveness. Notably, a strong culture is likely to have a positive influence on the information system evaluation process because of enhanced accountability and facilitation of voluntary reporting, which is important in attaining feedback in evaluation (Resnick 2007). Further, a strong culture provides an environment with greater opportunities for improvement, which is essential when deciding in efficient and applicable information systems for the organization.
On the other hand, a weak organization culture may undermine the process of evaluation because of its ability to impede communication amongst the stakeholders as well as decrease accountability in feedback within the organization (Reisnick 2007). Furthermore, a weak culture undermines the enforcement of values and objectives because of the presence of many subcultures, which reduce collaboration and undermine the opportunities needed for improvement when making decisions towards information systems development.
Effect of Organizational Culture on Information Systems Evaluation
In understanding the impact of organizational culture on information system evaluation, attributes to consider include productivity, performance, commitment, communication, and behavior. When considering user productivity, one assesses whether the information system is able to meet with the requirements of the organizational culture such as ensuring higher quality service delivery to customers (Ritchie 2000). For example, a strong organizational culture instills in employees a sense of commitment to the organization, and encourages the employee to pursue better working objectives to ensure increased productivity. Therefore, during evaluation, the evaluation team will assess whether the organizational culture is influencing higher productivity among the employees and other company associates, to determine the need for improvement or installation of a new information system that will be in alignment with productivity.
Secondly, organizational culture influences communication between employees and the management, which helps create an accurate perception of expected behavior because the management will be able to pass across their expectations to the employees and vice versa (Meijden, Tange, Troost et al 2003). In this context, the evaluation team assess whether the organization has in place mechanisms that influence employee and employer communication to enable them shape the information system towards improving the organizational attributes and relations. A strong organizational culture influences better communication models between the employees and the management and among other organizational stakeholders. Notably, organizational culture establishes the framework for determining the appropriate information system that will fit with the organizational beliefs and value system.
Another cultural aspect that has an influence on information systems evaluation is the organizational values such as accountability, error reporting, willingness to learn, and commitment. The organizational culture determines the process of accountability thus influencing the way members are likely to respond to the evaluation process, report errors with existing systems, and accurately report their usage (Meidjen et al 2003). Within a strong organizational culture where accountability is higher and error reporting is seen as an opportunity for learning, the evaluation team is likely to learn the shortcomings of an information system easily compared to a team within a weak organization culture where error reporting is low and accountability is inconsistent.
An additional organization culture attribute significant to the evaluation process is enforcement and adherence to organizational rules and regulations. A strong organizational culture encourages rules and regulations enforcement and adherence among the different people working in the organization (Resnick 2007). The evaluation team may consider how the employees or management responds to different instructions within the organization as a way of determining the possibility of misuse of information systems. Further, the response of employees and management to rules and regulation enforcement may serve as an indicator of future response to the regulations of information system use. Notably, organizational culture serves to show whether the employees and management have the potential to handle various information systems, and enable the evaluation team choose a system that is at the level of adherence and discipline.
Notably, organizational culture serves to inform how people within the organization are likely to handle the information system after installation. For example, the behavior of employees towards rules and regulation will show whether they can respond to information system requirements positively, while communication will serve to show collaboration in the use of the information system. Therefore, organizational culture is an important aspect in the information systems evaluation process because whether weak or strong it serves to show current use and potential response towards information system in the organization.
The purpose of this paper was to analyze importance of the evaluation of information systems in any organization and the effect of the organizational culture that is shown on the evaluation.
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