Given that the development of new systems can be fraught with problems and delays, what drives organisations to develop systems?
The most important drivers come directly from the needs of the business and are often not related to technology, but require technological solutions.
There are a number of possible triggers for the need to develop a new system including users identifying a need, organisations needing to grow or acquire other companies in order to extend their market share, the need to reduce staffing costs or an organisation needing to keep up with competitors.
A few more drivers are considered here:
Need for growth
Sometimes businesses can become stagnant. This means they are not growing (gaining new business and exploring new opportunities) or they are shrinking (losing business). Eventually, businesses that do not have any movement or change will begin to decline, although this can take some time.
Most organisations want to advance – they want to expand, become involved in new markets and increase profits. They need to grow to survive and for this they have to have a strategic plan. This is where the company decides what it wants to do and what direction it wants to take. As part of this process, its systems will be examined to ensure that they are capable of supporting the proposed growth. If this is not the case, then the organisation has time to address the issues.
It is not unusual for one company to buy out another. For example, the media company Telewest was purchased by the larger group NTL a few years ago. Since then, it has been sold again – this time to the Virgin Media Group.
An organisation may well buy another company for any one of or combination of the following reasons:
To access new markets: A company selling sports equipment, for example, buys a sports clothing company so that it can add products and services to its portfolio that it feels will interest its existing customers. Alternatively, an organisation might purchase a company active in a completely different market sector so that it can get involved in new different activities.
To increase market share of existing business: One supermarket chain buys out another supermarket chain, thus having more outlets and business overall. To acquire particular assets: Sometimes the acquisition is because one company needs to purchase the assets of another company so that it can use them itself. An example might be a car manufacturer buying an advertising company so that it can reduce its marketing and advertising costs.
If one organisation acquires another, it can do one of two things:
Allow the systems to continue running separately for each company Find ways of integrating systems so that organisations can work together
Which route is taken will depend very much on what managers intended when they purchased the company. If the acquiring company does not intend to keep its acquisition, for example, there would be little point in integrating the systems.
Need to increase productivity
When systems have been in place for a period of time, they are said to decay. This means that they become less and less useful to the organisation.
System will be heavily used – there will still be debugging activity and training needed.
During general use:
System is working as it should and is being used effectively.
Start of decay:
Inefficiencies are found that affect organisational productivity
What causes decay? These are a few examples:
New technology becomes available that would help increase productivity by improving efficiency. Capacity needs increase because sales have improved and productivity output does not match demand. The activities of competitors demand that the organisation improves its ability to respond. More users working on the system can slow it down, thereby making the system less productive overall.
At times an organisation has no other option but to respond to changes in the law. Responding to and implementing required changes in health and safety legislation is essential if an organisation is going to continue to operate within the law.
The one advantage of changes in legal requirements is that they are usually anticipated. It would not be fair if changes needed to be made immediately that would disadvantage one company over another. When new laws, or changes in existing laws, occur, companies usually have a grace period of time to prepare prior to the law coming into force.