The Outsourced Information Systems Failure (OISF)

Despite the many success stories showing the advantages of bringing IT into organizations, it is widely accepted that the processes of designing, developing and implementing IT are burdensome and not undemanding. Both recent and previous reports show that IS projects frequently fail. Broad and elaborate research on IS failures has been conducted for more than four decennia. Practitioners and expert witnesses frequently report IS failures in SMEs as well as in large companies.
IS failures can be divided into expectation and termination failures. Expectation failures can be further categorized into correspondence, process and interaction failures. Correspondence failures occur when information systems are evaluated in terms of previously defined design objectives. A lack of correspondence between design objectives and evaluation is seen as a failure. Process failures occur when there is unsatisfactory development performance, i.e. failure to produce a workable system or to deliver within the budget constraints of time and costs. Process failures are sometimes called ‘runaways’ or escalating projects. Interaction failures represent the mismatch between requirements and user acceptance. An interaction failure appears when an information system is not used. In summary, an expectation failure is the inability of an information system to meet the expectations of the stakeholders. There is a more pragmatic concept of failure and that is the termination failure. An IS failure only occurs when the development process or the operation of an information system causes dissatisfied stakeholders to abandon the project.
We argue that there is an extra dimension to IS failures that is not fully explained covered by those descriptive models, which we call the outsourced IS Failure (OISF). An OISF is a failure that occurs during an IS project in an outsourced environment. We focus thereby on project management. Some have already pointed out that outsourcing increases the risks that lead to IS.
If you want to read more about the OISF we can refer to the Electronic Journal of Information Systems Evaluation (EJISE).

http://www.ejise.com/volume11/issue2/p73

jan devos

31/01/2012

ERP as a Service in SMEs?

Last week I was lecturing ICT governance for SMEs at Nyenrode Business Universiteit in the Netherlands, where I had an interesting conversation with some of the students about the promises of Cloud Computing and the impact on SMEs. Some of the students were very clear and believed that the cloud was going to make it for SMEs on all fronts. Others (amongst them, myself) believed that ERP as a service will be not so easily adopted as the other cloud services.
Indeed, software as a service (SaaS) and infrastructure as a platform (IaaS) are looking very promising for SMEs. Both models allow SMEs to achieve more efficient use of their IT hardware and software investments: they increase profitability by improving resource utilization. Pooling resources into large clouds cuts cost and increases utilisation by delivering only for as long as needed. Cloud services tend to be very cost effective and offer scalability. SMEs can therefore grow without to worry about software and hardware upgrades. The tiered pricing models provided by cloud services are reducing barriers to enter the markets for ERP. More and more ERP solutions are now offered in the cloud. Since most SMEs are now at the dawn of implementing a real ERP system, a move with ERP together with a move to the cloud is at stake.
However the move to the cloud implies that the information system (IS) in an organization is in a stable modus, meaning that the system is fully used and that it is running in a regime modus. Before the regime modus can be reached, the SMEs need to go through a process of change. This is the modus of transition characterized by a high share of uncertainty, testing, experimenting, conversions, fine tuning, and developments. In that period is it well known that the system is not stable at all! However the transition period is an obstacle that SMEs must overcome, before they can harvest the fruits of their ERP investment. Most SMEs are looking at the ripe fruit, shown by the vendors in their glossy brochures illustrating the benefits of their ERP solution, but tend to forget that before one can harvest, there is a though period of preparation, cleaning, changing, growing and very important, maturing, one needs to go through. Any farmer will tell you that. The transition period will also take time, especially for the these SMEs who lack the necessary IT management capabilities. And last but not least, in the transition period the risks for an IS failure are fairly high.
The implementation phase is a costly period by which the SME needs to invest in time and support given by a caring independent IT vendor or IT consultant, leading the SMEs trough the transition period. In the transition period the cloud will not be of any use or does not bring a tangible advantage.
And there is more. The expenditures of an ERP implementation are now roughly divided as follows: 20% hardware costs, 20% licenses costs and 60% implementation costs. Hardware and licenses costs can certainly be affected by a move to the cloud, although these costs will of course not completely vanish. The implementation costs however stay ever high in the expenditures pie chart. Before an ERP system is running in a stable modus in an SMEs, a time of one up to two years can be needed. During that time the cloud can be used, but will not offer a real benefit.
Only when the SME has come at regime with his ERP system, the move to the cloud can be really beneficial. But let us not try to run before we can walk!
jan devos

SOPA en PIPA: ontkennen van het licht van de zon?

21 Januari 2012
Er is de laatste tijd heel wat te doen geweest over de twee Amerikaanse wetsvoorstellen SOPA en PIPA. De voorstellen zijn bedoeld om piraterij en namaak van  intellectuele en immateriële creaties een halt toe te roepen. Dagelijkse worden de auteursrechten van vele artiesten en softwareontwikkelaars geschonden door illegale downloads. De digitale revolutie en de breedbandtoegang tot het internet maken slachtoffers zoveel is duidelijk. Het bestrijden van de uitwassen van deze evolutie is uiteraard toe te juichen. De vraag die we hierbij moeten stellen is hoe pakken we dit aan? Maar eigenlijk moeten we nog dieper peilen naar de oorzaken van de kwaal. Zoals dit eigenlijk altijd zou moeten. Het blijkt dat deze vergaande wetgeving eigenlijk niet nodig is en vooral  economisch contraproductief is.
Misdaad volgt eigenlijk heel eenvoudige regels die verrassend gelijklopen met bonafide operaties. Zoveel mogelijk resultaat met zo weinig mogelijk kosten of inspanningen. Het is deze wanverhouding die in de digitale wereld momenteel  aan de orde is. Waarom zou ik €20 betalen voor laatste CD van mijn favoriete band als ik in de beslotenheid van de huiskamer de songs voorlopig gratis kan ophalen van het internet? Schend ik daarmee de auteursrechten? Jazeker. Ben ik bereid om prijs te bepalen voor mijn muziek: jazeker, maar ik heb ondertussen wel gezien dat €20 betalen echt niet hoeft. Waarom kan ik mijn songs niet downloaden op een legale manier? Blijkbaar nog niet.
De oorzaak hiervan is het enorme deficit en gebrek aan creativiteit van de bestaande marktspelers op gebied van het exploiteren van het potentieel van de digitale revolutie.  Momenteel kunnen we met ons allen getuige zijn hoe Kodak als een moderne Titanic ten onder gaat. Een voorbeeld die kan tellen. Er is een fundamentele paradigmaverschuiving gaande in het aanpakken van marktpotentieel die vele bedrijven wel zien, maar kost wat kost willen bestrijden. De verschuiving bestaat uit de aanvallen van de zogenaamde ‘emergent collectives’ (EC) die overal opduiken en die de ommuurde tuinen van grote gevestigde marktgiganten omvergooien. EC’s ontstaan spontaan in het kielzog van het breedband internet. Voorbeelden van ECs zijn:  de open softwarebewegingen, sociale media: YouTube, Facebook, Twitter; blogging gemeenschappen, virtuele organisaties, edm.  Gebruikers bepalen meer en meer hun eigen content op het internet en wensen daarbij niet gestuurd worden, laat staan betalen voor iets wat ze niet zien als extra waarde.  Het fenomeen doet zich voor in de filmindustrie, de pers, de media, de muziekindustrie, de software-industrie, de fotografie, kortom in elke sector die sterk door de digitalisering wordt beïnvloed. Vele grote bedrijven hanteren een Porteriaanse strategie om zich te handhaven in een markt en de concurrentie voor te zijn. Hierbij wordt er ondermeer macht uitgeoefend op de klanten en de leveranciers. Klanten worden eigenlijk binnen een dergelijke strategie gegijzeld door het bedrijf. Denk maar aan de telecomoperatoren die nog altijd het recht opeisen om klanten (veel) te laten betalen voor de toegang tot het internet. Velen beginnen nu in te zien dat dit eigenlijk geld af troggelen is. De klant is zeker bereid te betalen maar dan voor een evenwichtig aanbod en met een waardepropositie die in evenwicht is met de vraag. Inderdaad waarom zou ik een duur 4G-abonnement nemen als er overal WIFI-hotspots ontstaan waarmee ik precies hetzelfde kan doen maar dan gratis?
Dit is het probleem. De bestaande grote bedrijven blijven strijden om hun ommuurd tuintje te beschermen. Dat is best te begrijpen: men slacht niet de kip die gouden eieren legt. Maar de strijd zal ooit moet worden opgegeven. De energie moet gaan naar het ontwerpen van nieuwe businessmodellen om het potentieel van de digitale (r)evolutie en de opkomst van de EC’s te ontginnen. Apple is de eerste geweest die alvast een voorzet gegeven heeft met iTunes voor de muziekindustrie. Wanneer volgen de anderen?
Het wordt dan helemaal niet nodig om wetten zoals SOPA en PIPA te maken die eigenlijk het werk zijn van de lobby van de voorstanders van de ommuurde tuinen. Het licht van de (digitale) zon negeren en weigeren te innoveren is blijkbaar troef.  Het conservatisme toont zijn tanden.  Spijtig.

jan devos

Theoretical Foundations for IS Success in Small- and Medium-sized Enterprises

Small and medium-sized enterprises (SMEs) adopt information technology (IT) and information systems (IS) in order to achieve business goals and obtain net benefits. However, adopting IT/IS into an existing organizational structure is a complex and risky task. Many investments in IT/IS, outsourced as well as in sourced, never fully reach the intended objectives and are therefore considered as not being successful.

In this work, we have focused on IS success in SMEs in order to find theoretical foundations. We have explained four well-known theories, often used in IS research, which constitute the basics of our thinking. These theories are the Technology Acceptance Model (TAM), the Theory of Planned Behavior (TPB), the DeLone & McLean IS Success Model (D&M) and the Transaction Cost Economy (TCE) model. We have woven the constructs of these theories into a compound framework that delivers explanatory and predicting power for the successful adoption of IT/IS in SMEs. Our framework is also consistent with the nomological IS network established by Benbasat and Zmud (Benbasat & Zmud, 2003).

In order to validate our framework, we examined the extent to which our theoretical model could provide support for the Cobit framework, often used by practitioners as an IT governance framework, and also suitable for SMEs. Our findings show that our framework offers surprising coherence and proposes a strong theoretical foundation for the normative directions of the methods used in Cobit by IT practitioners.

Read more chapter five of the book: Measuring Organizational Information Systems Success: New Technologies and Practices.

http://www.igi-global.com/book/measuring-organizational-information-systems-success/58291

jan devos

 

 

The Market for Lemons

   The “lemon” problem was initially posed by Nobel Prize winner Akerlof in his seminal article of 1970 and showed how a market with unbalanced information, called information asymmetry, can lead to complete disappearance or to offerings with poor quality where bad products (lemons) wipe out the good ones. Empirical evidence for Akerlof’s theory came originally from the market of used cars, where the lemon is a well known problem. However the theoretical model of the “lemon” problem has proven also to be valid on other markets and in comparable situations like internal markets. The theory is also been used more and more in IS research especially since the emerging e-commerce initiatives and the continuous growth of e-markets and auctions. In this chapter we bring a description of the theory by presenting its nomological network and its linkages to other well known theories in IS research. The relevance for the theory is shown to explain phenomenon’s in the IS discipline. An overview is given of current and past IS articles using the Lemon Market theory (LMT) together with a bibliographical analysis of the references to the original Akerlof article.

Read the full article as chapter 11 of the book: Information Systems Theory: Explaining and Predicting Our Digital Society, Vol. 1

jan

Rethinking IT Governance for SMES

Today my first A1 academic article is published in the Industrial Management & Data System journal.

The article can be viewed at the following link:

http://www.emeraldinsight.com/journals.htm?issn=0263-5577&volume=112&issue=2&articleid=17010308&show=abstract

Any citations to this article should include journal name, year of publication, volume and issue number. Please state that publication of this article is forthcoming.

Enjoy reading!

jan

Bricolage: a solution for SMEs?

Building and implementing information systems (IS) is considered as a highly rational endeavor carry out by engineers with the aid of all sort of tools. The strive for control, and therefore also a strive for formalization is omnipresent in the mind of most stakeholders. The reigning paradigm is inferred from mechanical engineering which has proofed to be of significant success in the past century. However, one cannot ignore the large quantities of failed IS projects conducted in organizations. For small and medium-sized enterprises (SMEs) who suffer from resource deficits and a lack of necessary managerial IT capabilities, the acquisition of an IS is an almost unachievable goal. SMEs are therefore constant in search of alternative ways to take advantage of IT in their organization. The implementation of ERP is a solution, although ERP suffers from a high barrier to enter and leads not always to success. Cloud computing with software as a service (SaaS) looks promising for SMEs, albeit that SMEs still hesitate to adopt the concept because of issues of privacy and security.
Going back to the idea of IT and formalization, there is a method which contrast with this school of thinking. A resulting concept of this alternative way of thinking is known as ‘bricolage’ and was introduced by C. Ciborra (2002). At first glance, the (French) term bricolage does not have a positive overtone and is mostly associated with amateurs fooling around with all sort of tools and materials trying to build something useful. The results of their craftwork is certainly not a piece of art nor has it nicely followed the rules of a careful and pre-planned design, but it has one major feature: it works! People hesitate to call their way of working bricolage, but actually this is often done in organizations and thus in a professional environment. What else would you call an information system that is build up with three different operating systems linked together with middleware that is downloaded from the Internet and not approved by a supplier, with on top an application that was started from an ERP system but already drifted away from the official version due to an overload of customization software? A SME CEO could not care less as long as the system is doing what it is suppose to do, supporting the business.
IT people dare not to tell frankly about their own IT systems on public occasions and conferences. All presentations given at these venues are stuffed with terminology and buzz word that suppose to match the reality. Less is true. There is a very wide gap between what consultants (and academics) are telling on seminars and what is really happening in organizations. Ciborra, being a scholar, had the courage to see through the lens of a practitioner to IT in organizations while keeping up an academic stance. So he came up with the concept of bricolage. His initial inspiration came from the Russian MIR space station. MIR was suppose to have a short lifetime, but this was constantly prolonged by space engineers who muddled with all sort of tools and materials to kept the station longer in space and succeeded with this approach.
The concept of bricolage is well defined by Ciborra. Bricoleurs are using resources that they intimately familiar, so called ‘materials at hand’, to address new tasks and challenges. Applying bricolage to IS, materials at hand are considered to be hardware and software artifacts. But there is more needed to establish the full concept of bricolage in SMEs. The contribution of professional and personal networks play also a role in forming the strategic direction. So bricolage in SMEs is certainly noticeable on the operational level but also on the strategic level. There is mostly no long term direction  or strategic plan on IT in SMEs. So improvisation and opportunism also make a deal of the strategic action in SMEs. This is bricolage on the strategic level. Indeed SMEs tend to improvise with the strategic choice for an IS by choosing and adapting a business model offered by an external IT vendor.
To succeed with the concept of bricolage in SMEs, the following is suggested by Ferneley and Bell (2006):
–    CEOs of SMEs must be aware of their available resources, which they often are, but also have a favorable view on external resources and be prepare to purchase additional technical resources to support bricolage on the operational level.
–    CEOs must observe and listen to external bricoleurs without immediately viewing proposals in term of costs. Observation of competitors with similar business models can be a stimuli for internal bricolage.
–    Trust in external and external bricoleurs is essential to create an environment where bricolage can thrive.
–    Bricolage needs some control. The bricoleurs need to come to a level of self regulation. Bricolage with no control is naive, but too much control can stop the innovation process.
An example of a project of bricolage with IT in an SME is currently running and is under observation to report progress and findings.  A case study report on the results will be published shortly.

jan devos

%d bloggers like this: