Information technology in business environment Essay

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Information technology in business environment

The business environment is becoming increasingly competitive. Information technology is now providing business entities with basic as well as progressive business tools that will enable them to improve their financial performance, efficiency, and its use of the organisation central operational resource and staff members. Adoption of computerised system is vital to the businesses entities that want to improve their efficiency and performance by using computerised systems to facilitate their day-to-day transactions. Lots of researches were conducted to assess the critical success factors or CSFs for implementations of computerised systems, but the results were different from each other. Trough lots of researching, the nine CSFs were outlined in this paper. The interrelations between the nine CFSs were also discussed.

Introduction.

The business environment is becoming increasingly competitive. Market boundaries have become larger and barriers to entry have diminished. In the current turbulent economic environment today’s modern organisations must closely examine the way they currently do business not only to remain competitive and profitable but also to simply remain in business (Cameron & Philip, 2001). Information technology is now providing business entities with basic as well as progressive business tools that will enable them to improve their financial performance, efficiency, and its use of the organisation central operational resource and staff members.

Adoption of computerised system is vital to the businesses entities that want to improve their efficiency and performance by using computerised systems to facilitate their day-to-day transactions. The purpose of this paper is to outline and assess the critical success factors for the adoption of computerised systems including ERP (Enterprise Resource Planning) implementations by businesses entities, and then analysis the interrelations between these critical success factors.

Outline of Critical Success Factors for Adoption of Computerised Systems

Implementations of computerised systems including ERP (Enterprise Resource Planning). Implementations are usually large and complex projects. Although the adoption of small businesses would be simple and easy, we focus on the adoptions of computerised systems by medium or large organisations here, especially ERP implementations. Because ERP systems seek to integrate all department and functions across a company onto a single enterprisewide information system that can serve all those departments’ particular needs (Considine, et.al, 2005:p290). ERP (Enterprise Resource Planning) systems may well count as ‘the most important development in the corporate use of information technology in the 1990s’ (Davenport, 1998).

The adoptions of cumputerised systems, such as ERP implementation, by large organisations often involve large groups of people and other resources, working together under considerable time pressure and the developments could not be predicted. Lots of researches were conducted to assess the critical success factors or CSFs for implementations of computerised systems, but the results were different from each other. Trough lots of researching, the CSFs could also be concluded in this paper below:

No. Critical Success Factors & Rank

1 Top Management Support: A

2 Clear Goals & Objectives: A

3 Project Management: A

4 Interdepartmental Co-operation & Communication: A

5 Project Team Competence: A

6 Vendor Support: B

7 Computerised System Package Selection: B

8 Data Analysis & Conversion: C

9 Staff Training: C

Although beside the CFSs stated above, there must be a lot of other CFSs affect the implementations of computerised systems, these nine CFSs listed above should be the most important ones among all the factors affecting the implementions of computerised systems. As shown in the diagram, the CFSs are numbered form one to nine and ranked from A to C. The CFSs ranked A represents the ones that are most important CFSs should be taken into consideration when we come to implementations of computerised systems. Generally, CFSs in the same rank seem to be equally important; because it’s hard to say which one is the more important than the other, that depend on what situation we faced.

Analysis of Critical Success Factors for Adoption of Computerised Systems

(1) Top Management Support (Rank A)

If top management is not actively backing an all-pervasive project like an ERP implementation, there is little hope for it (Akkermans & Helden, 2002). This does not mean that middle management and other staff are not important, top management itself is not omnipotent in the whole project. The key is that top management is vital and other issues such as middle management are also important as well in this kind of processes. However, if top management permanently delegates its responsibilities to technical experts, the chances for project failure are high (Ewushi-Mensah & Przanyski, 1991).

(2) Clear Goals & Objectives (Rank A)

When people or oganisations want to do something, the goals and objectives must be clear. Because you don’t know why you have to do it without goals as well as objectives, and you can’t plan for it. This simple rule certainly applies to the implementations of computerised systems. Especially for implementation of an IT project, the first step should be identification of goals and ways to accomplish these.

(3) Project Management (Rank A)

As it is mentioned above, adoption of computerised system is complex, costly and time consuming. The management of such a project should be tight and careful because of the complexity. Some degree of improvisation would be needed because of some unforeseen changes would occur during the process. The performances of the employees are also important. As A.R. Elangovan and Jia Lin Xie(2000) said: managers should pay more attention to how their power is perceived by their subordinates as well as carefully examine the trade-off between short-term and long-term consequences of such perceptions to be effective.

(4) Interdepartmental Co-operation & Communication (Rank A)

Interdepartmental communication: Communication across different business functions and departments is one of the most important issues involved in the IT implementation literature. According to one author on IT project management, ‘communication is the oil that keeps everything working properly’ in these contexts (Schwalbe, 2000).

Interdepartmental co-operation: The effectiveness of interdepartmental co-operation heavily depends on the extent of interdepartmental communication. Quality interdepartmental communication reinforces the quality of interdepartmental co-operation. Because the computerised systems seek to enable the organisation to operate as a whole, interdepartmental co-operation is vital.

(5) Project Team Competence (Rank A)

The ability of the project team is also important to the implementation of a computerised system. This argument is supported by considerable amount of researches. It’s really important. Effective project team could minimise the cost as well as the time consumed and ensures the implementation of project is in the correct way.

(6) Vendor Support (Rank B)

Most of the time, organisations do not have all the technical as well as transformational skills and knowledge for managing such a major undertaking on its own. As a result, support provided by the vender is important to aid the implementation of new system.

(7) Computerised System Package Selection (Rank B)

Different system packages are designed to meet different organisational requirements. For example, some packages are suited for large organisations but some are more suited for smaller ones. Selection of system package depends on what kind of organisation you have got and other organisational requirements and goals.

(8) Data Analysis & Conversion (Rank C)

Before use of the newly installed computerised system, the project team and the organisation have to transfer existing data from existing system to the database of the new comprised system. This refers to the process of Data Conversion. As data conversion is typically a manual operation, controls are needed to ensure that the data conversion has been accurately performed (Dhaliwal & Konsynski, 1977). Data should be tested to ensure that the process is successful, no errors incurred and no information lost.

(9) Staff Training (Rank C)

The desirability of computers taking account of user capabilities was pointed out by Licklider (1960)(Feeney & Hood, 1977). It’s not so important but essential for orgaisations to train their employees after installation of new computerised systems. To some extent, the performance of a new system depends on the performance of the staff within the organization (Bartol, et.al 2001:p295). Quality staff training would enable the new system to be successful and effective.

Interrelations Between These Critical Success Factors.

All the CFSs should not be considered in isolation, because they are interacting with each other and affecting each other as well. The relationships between these critical factors are delicate and different from each other. For example, with strong vendor support, the project team would work more effective and the project team competence would be strengthened. This is known as the virtuous cycle.

But the interaction and relationship between CFS 6 and CFS 7 would be different. The vendor support should be taken into consideration when we are selecting computerised system software. Software with strong vendor support is always preferred by the organisations, but the quality of the software itself is also important. In addition, increase of CFS 4 has a considerable positive impact on all other CFSs as well as the whole process of implementation.

As it is mentioned above, all the CFSs are working together and interacting with each other throughout the whole project. None of them can be considered in isolation. Interdepartmental co-operation & communication within the project team was found to be the core process for project progress. Presence and attitudes of the surrounding stakeholders, ie top management, project management, software vendor support and so on, were identified as the root causes driving performance of this core process. At the time of the crisis, simultaneous and mutually reinforcing changes in presence and attitudes of all these stakeholders enabled the transition from a vicious into a virtuous cycle of project performance (Akkermans & Helden, 2002).

Conclusion.

Information technology is now providing business entities with basic as well as progressive business tools that will enable them to improve their financial performance, efficiency, and its use of the organisation central operational resource and staff members. Adoption of computerised system is vital to the businesses entities that want to improve their efficiency and performance by using computerised systems to facilitate their day-to-day transactions.

Lots of researches were conducted to assess the critical success factors or CSFs for implementations of computerised systems, but the results were different from each other. Trough lots of researching, the CSFs could also be concluded, they are top management support, clear goals & objectives, project management, interdepartmental co-operation & communication, project team competence, vendor support, computerised system package selection, data analysis & conversion and staff training. All the CFSs should not be considered in isolation, because they are interacting with each other and affecting each other as well.

Bibliography:

Akkermans H. and Helden K. V. 2002 ‘Vicious and Virtuous Cycles in ERP Implementation: a case study of interrelations between critical success factors’, European journal of information system, no.11, pp35-46

Bartol K, Martin. D., Tein M. and Matthews G., 2001, Management, A Pacific Rim Focus, 3rd Edn, McGraw-Hill, Sydney, p295

Cameron, D. and Philip, J. ‘The Adoption and Use of Electronic Banking by SMEs in Australia: An Exploratory Study’ CollECTeR 2001. http:// www.collecter.org/collecter01/Doug_Cameron.pdf (6 May. 2005)

Considine B., Razeed A., Lee M. and Collier P. 2005, Accounting Information System: understanding business process, 1st edn, John Willey & Sons Australia, Ltd, Queensland, p290

Davenport T. 1998, ‘Putting the enterprise into the enterprise system’, Harvard Business Review July-August, pp.121-131

Dhaliwal D. and Konsynski B. 1977, ‘Data integrity considerations in computer based accounting systems’, Proceedings of the 1977 annual conference

Elangovan A. R. and Xie J.L. 2000, “Effects of perceived power of supervisor on subordinate work attitudes”, Leadership & Organization Development Journal, Vol.21, no.6, pp.319-328

Ewushi-Mensah K. and Przanyski Z. H. 1991, ‘On information systems project abandonment: an exploratory study of organizationa practices’, MIS Quarterly 15, pp.67-85l

Feeney R. and Hood J. 1977, ‘Adaptive man/computer interfaces: information systems which take account of user style’, ACM SIGCPR Computer Personnel, Volume 6 Issue 3-4

Schwalbe K. 2000, ‘Information Technology Project Management’, Course Technology, Cambridge MA

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