Information Technology Reference
In-Depth Information
its market share by 20 percent. Information systems can also help organizations bring new
products and services to customers in less time. This is often called speed to market. A music
producer, for example, can bring a new song or record to the market by placing it on an
online music site faster than it can produce CDs and ship them to retail music stores.
Customer Awareness and Satisfaction
Although customer satisfaction can be difficult to quantify, about half of today's best global
companies measure the performance of their information systems based on feedback from
internal and external users. Some companies and nonprofit organizations use surveys and
questionnaires to determine whether the IS investment has increased customer awareness
and satisfaction. Researchers at the University of Auckland, for example, developed surveys
and other measurements of an electronic learning system, called CECIL, to determine the
satisfaction and experience of students using the electronic learning approach.
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Total Cost of Ownership
Another way to measure the value of information systems was developed by the Gartner
Group and is called the
total cost of ownership (TCO).
TCO is the sum of all costs over
the life of the information system and includes the cost to acquire the technology, technical
support, administrative costs, end-user operations, etc. Market research groups often use
TCO to compare products and services. For example, a survey of large global enterprises
to TransUnion's Chief Technology Officer, “Looking at the total cost of ownership and short
implementation cycle, Azul's hardware was the best alternative for us, providing minimal
downside risk.” TCO is also used by many other companies to rate and select hardware,
software, databases, and other computer-related components.
Return on investment, earnings growth, market share, customer satisfaction, and TCO
are only a few measures that companies use to plan for and maximize the value of their IS
investments. Regardless of the difficulties, organizations must attempt to evaluate the con-
tributions that information systems make to assess their progress and plan for the future.
Information systems and personnel are too important to leave to chance.
total cost of ownership (TCO)
The measurement of the total cost
of owning computer equipment,
including desktop computers,
networks, and large computers.
Risk
In addition to the return-on-investment measures of a new or modified system discussed
in Chapter 1 and this chapter, managers must also consider the risks of designing, developing,
and implementing these systems. Information systems can sometimes be costly failures.
Some companies, for example, have attempted to implement ERP systems and failed, costing
them millions of dollars. In other cases, e-commerce applications have been implemented
with little success. The costs of development and implementation can be greater than the
returns from the new system. The risks of designing, developing, and implementing new or
modified systems are covered in more detail in Chapters 12 and 13, which discuss systems
development.
Realizing the benefits of any information system requires competent and motivated IS per-
sonnel, and many companies offer excellent job opportunities. As mentioned in Chapter 1,
knowledge workers (KWs)
are people who create, use, and disseminate knowledge. They are
usually professionals in science, engineering, business, and other areas that specialize in in-
formation systems. Numerous schools have degree programs with such titles as information
systems, computer information systems, and management information systems. These pro-
grams are typically offered by information schools, business schools, and within computer
science departments. Graduating students with degrees in information systems have attracted
