From: Subject: Information Systems Evaluation Date: Thu, 22 May 2003 21:54:20 -0400 MIME-Version: 1.0 Content-Type: multipart/related; boundary="----=_NextPart_000_0000_01C320AC.B3130DE0"; type="text/html" X-MimeOLE: Produced By Microsoft MimeOLE V6.00.2800.1106 This is a multi-part message in MIME format. ------=_NextPart_000_0000_01C320AC.B3130DE0 Content-Type: text/html; charset="Windows-1252" Content-Transfer-Encoding: quoted-printable Content-Location: http://www.comp.glam.ac.uk/SOC_Server/research/gisc/EVALBrf2.htm Information Systems Evaluation

Kane Thompson Centre

For Studies in Information Systems and = Information=20 Technology

Briefing Paper - = 2

Author: Paul Beynon-Davies

Title: Information Systems = Evaluation

Date of Publication: December=20 1998

Content

  1. The importance of Information Systems (IS) evaluation to = effective=20 IS management and development processes within organisations

  2. The various types of IS evaluation

  3. Relationship between the types of IS evaluation and = organisational=20 learning in terms of IS and IT

Contact for further details:

Dr. Paul Beynon-Davies,
Reader,
School = of=20 Computing,
University of Glamorgan,
Pontypridd
CF37 = 1DL=20

Tel: 01443 =96 482243
Fax: 01443 =96 482715=20

Email: pbeynon@glam.ac.uk

 

Not for Reproduction without the express = permission of=20 the Author and the KTC

 

The Importance of IS Evaluation

In recent years a number of questions have been = frequently=20 voiced by general management within organisations in relation to = information=20 systems (IS) and information technology (IT):

  1. Do we know how much is currently spent on IS and IT?

  2. What value results from this spending?

  3. How should IS/IT alternatives be justified/ prioritised/ financed?

  4. Why do we continually experience cost and time overruns in = relation to=20 IS/IT projects?

  5. Why do IS budgets continue to rise while IT unit costs continue to = fall?

  6. How can we regain our belief in IS returns?

All such questions relate to the issue of evaluation. = This=20 briefing paper focuses on the evaluation of information systems by = organisations=20 and discusses the importance of this activity. We also highlight the = different=20 forms of evaluation and indicate some of the problems in the way in = which=20 organisations conduct evaluation.

A Model of IS Evaluation

Figure 1 presents a model of IS evaluation fitted to = the=20 life-cycle of information systems development. This illustrates the = importance=20 of evaluation to processes of organisational learning. Organisations = need to=20 conduct evaluation to:

  1. Assess and prioritise investment in IS and IT

  2. Control IS costs

  3. Determine the value arising from IS and IT

  4. Determine changes needed to the organisation=92s IS portfolio

  5. Learn successful strategies for IS management and development

What are we evaluating

Conventional approaches to IS evaluation stress a = product-based=20 focus - the evaluation of information systems or components. In terms of = information systems we can distinguish between three dimensions on which = an IS=20 should ideally be assessed.

  1. Functionality. Does the information system do what is = required?

  2. Usability. Is the information system useable by its intended=20 population?

  3. Utility. Does the information deliver key business benefit for = the=20 organisation?

 

Assessing the degree to which a system is = functionally complete=20 and consistent is a classic concern of systems development.

Assessing the usability of systems has become = important with=20 the continuing progress and use of graphical user interfaces and = multi-media=20 interfaces.

Assessing the utility of IS is something which most=20 organisations conduct at the pre-implementation stage of a project but = seldom=20 thereafter. However, this form of evaluation is becoming increasingly = important=20 because of the greater pressure being placed on the IS function to = account for=20 its activities.

Types of evaluation

Figure 1 makes a distinction between three types of = IS=20 evaluation activity:

  1. Strategic Evaluation. Sometimes referred to as = pre-implementation=20 evaluation, this type of evaluation involves assessing or appraising = an IS/IT=20 investment in terms of its potential for delivering benefit against = estimated=20 costs.

  2. Formative Evaluation. Formative evaluation involves assessing = the=20 shape of an IS whilst in the development process itself. Formative = evaluation=20 may be used to make crucial changes to the design of an information = system or=20 to make critical decisions concerning the degree of project = abandonment. Such=20 a form of evaluation is particularly relevant in the context of = iterative=20 approaches to development such as rapid application development (RAD) = (see KTC=20 briefing paper 1).=20

3. Summative Evaluation. This type of = evaluation occurs=20 after an IS has been implemented. For this reason it is sometimes = referred to as=20 post-implementation evaluation. Ideally, summative evaluation involves = returning=20 to the costs and benefits established in strategic evaluation after a = period of=20 use of the IS.

Costs and Benefits

IS evaluation may be defined as the attempt to assess = the=20 success or failure of an information system and the associated process = by which=20 the information system is developed and implemented. Although evidence = suggests=20 that organisations do not conduct evaluation of their systems and = projects very=20 effectively, the systematic evaluation of IS projects is critical to=20 improvements in both development and organisational success.

Evaluation is normally expressed in terms of costs = and=20 benefits. IS costs concern the investment needed in an IS. IS benefits = concern=20 the value that the organisation gains from having an IS. If benefits = outweigh=20 costs then the project and system are regarded as successes. If costs = outweigh=20 benefits then the system and project are classed as failures.

It is useful to make the distinction between two = types of costs=20 and benefits associated with IS projects: tangible or visible = costs/benefits and=20 intangible or invisible costs/benefits. Tangible costs or benefits are=20 frequently referred to as visible costs/benefits because they are = reasonably=20 straightforward to measure. Intangible costs or benefits are frequently = referred=20 to as invisible costs/benefits because most organisations experience = difficulty=20 in assigning actual measurable quantities to such costs and = benefits.

A typical list of cost-types associated with IS = projects is=20 given below:

  1. Hardware Costs: computers, printers, storage, accessories etc.

  2. Software Costs: off-the-shelf packages, bespoke = software,=20 development tools etc.

  3. Installation Costs: data entry, data conversion etc.

  4. Environmental costs: wiring, furniture, air-conditioning etc.

  5. Running costs: electricity, communication costs etc.

  6. Maintenance costs: on hardware and software.

  7. Security costs: risk management and disaster recovery = mechanisms.

  8. Networking costs: network hardware, software and maintenance.

  9. Training costs: frequently under-estimated.

  10. Wider organisational costs: new salary structures, management = etc.

The important point to make in relation to this list = is that=20 the costs of an IS must be taken into account over its entire life, not = solely=20 in terms of its development cost. Frequently organisation forget that = the=20 initiation of an IS means a permanent commitment to costs in terms of = continuing=20 resources being committed to the running and maintenance of the IS.

Below we list some of the classic benefits associated = with=20 information systems:

  1. Accuracy: increased accuracy of information

  2. Quality: better quality information

  3. Usability: more useful information

  4. Flexibility: ability to use information more flexibly

  5. User satisfaction: increased work satisfaction

  6. Functionality: more effective working

  7. Reliability: more reliable service

  8. Utilisation: more information used

  9. Relevance: more focused information

  10. Productivity: increased levels of working

  11. Security: more secure information

  12. Profitability: more money

  13. Speed: getting information quicker

  14. Volume: more information

Information systems have frequently been initiated = with the=20 objective of gaining tangible benefits such as reducing staff count or=20 increasing productivity. Intangible benefits are more generally = associated with=20 issues of organisational efficiency. More recently people have started = to argue=20 that intangible benefits such as increasing customer satisfaction or = building=20 better links with suppliers have equal relevance in investment = decisions.=20 Intangible benefits are more generally concerned with organisational=20 effectiveness.

The Model Explained

Most organisations conduct some form of strategic = evaluation of=20 IS projects.

Strategic evaluation is an activity which attempts to = establish=20 the balance of costs and benefits in terms of an intended IS project. It = is=20 normally used to initiate a go/no-go decision in terms of a given = project. It=20 may also be used to prioritise a number of IS investments. The most = popular=20 techniques applied in this process are return on investment and=20 payback period. Such techniques are effective ways of evaluating = tangible=20 costs against tangible benefits. One of the most popular frameworks = which=20 includes facilities for an assessment of intangible costs and benefits = is=20 Information Economics.

Formative evaluation should be an inherent part of = the project=20 management process. Development projects should be continually assessed = against=20 objectives and careful attention should be paid to this activity to = avoid=20 project escalation. Project escalation is defined as the continued = commitment to=20 an IS project in the face of continual negative information from = formative=20 evaluation exercises. Major stakeholders in an IS project may be = reluctant to=20 withdraw support because of heavy investment in personnel and other = resources=20 devoted to a project.

At some point in this process a decision may be made = to either=20 wholly or partially abandon a project. In either case, the organisation = should=20 engage in another form of IS evaluation called here a Post-Mortem = analysis. This=20 should attempt to determine the key reasons for such total or partial = failure.=20 In a recent international survey, 60% of organisations internationally = and 67%=20 of organisations in the UK had suffered at least one systems project = that had=20 failed to deliver planned business benefits or had experienced = significant cost=20 and time overruns.

The results of such an analysis are important in = suggesting=20 ways in which the organisation may improve its development practice. It = is for=20 this reason that the document produced from the Post-Mortem analysis = needs to be=20 disseminated to senior management, project management and members of the = project=20 team. This, of course, can only be done effectively if assurances of=20 non-recrimination are given to all project participants. Ideally, this = analysis=20 should be conducted by a reputable senior executive that was not = involved in any=20 way with the project under consideration. Alternatively, it should be = undertaken=20 by an external body or consultant.

Wherever possible post-mortem information should be = made=20 public. This is important in enabling the validation of IS development = practice=20 and the effective progression of the profession of IS.

The figure also emphasises another important = organisational=20 learning feedback loop. Even if a project reaches completion, it may = fail in=20 some sense when it comes to be delivered. Therefore, at some suitable = time after=20 a system has been delivered the organisation should engage in a = summative=20 evaluation of the system and its project. One framework proposed for the = summative evaluation of IS is benefits management. Even at this = point it=20 is possible that the system may be wholly or partially abandoned, in = which case=20 it should also be the subject of a Post-Mortem analysis, as above.

It is important to emphasise that no system is ever = complete. A=20 summative evaluation is likely to suggest a number of ways in which the = system=20 may be modified or extended =96 normally both classed as systems = maintenance. This=20 is the third feedback loop illustrated on the diagram. The conclusion is = that=20 effective evaluation leads to effective management of maintenance.

For more information on ERP systems and implementation = and other=20 topics relevant to IS managers and developers = contact:

The=20 Kane-Thompson Centre

For=20 studies in Information Systems and Information Technology =

Dr.=20 Paul Beynon-Davies,
Reader,
School of Computing,
University = of=20 Glamorgan,
Pontypridd
CF37 1DL

Tel:=20 01443 - 482243
Fax: 01443 - 482715

Email:=20 mailto:PBDAVIES@Glamorgan.ac.uk<= /A>

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