Evaluating IT/IS investments: A fuzzy multi-criteria decision model approach

IT/IS represents a substantial financial investment for many organizations. Whether or not to invest in new IT/IS is, therefore, a difficult decision. Simply considering human resource cost saving criteria is not enough, especially when a corporation has had many information systems. What kind of criteria should we consider when we evaluate IT/IS? How can a new IT/IS project be evaluated in an easy, cost-effective, and collective manner? We need a tool that will help decision-makers evaluate potential new investment projects. Apart from evaluating the new project per se, its compatibility and ability to integrate with an existing IT portfolio must also be considered. Hence, we propose a new approach based on the fuzzy multi-criteria decision model (FMCDM), featuring a 2-stage evaluation process with 26 criteria for IT/IS investment. All stakeholders in a corporation can decide the relative weights they give to the criteria when they evaluate a new IT/IS project by using linguistic values. Experts can also use linguistic values to evaluate all candidates easily. Only an Excel worksheet is needed to obtain an evaluation result. It is cost-effective and efficient. We conduct a case study to show how this model can be used and discuss the results.     

Information technology and systems justification: A review for research and applications

Information technology (IT) such as Electronic Data Interchange (EDI), Radio Frequency Identification Technology (RFID), wireless, the Internet and World Wide Web (WWW), and Information Systems (IS) such as Electronic Commerce (E-Commerce) systems and Enterprise Resource Planning (ERP) systems have had tremendous impact in education, healthcare, manufacturing, transportation, retailing, pure services, and even war. Many organizations turned to IT/IS to help them achieve their goals; however, many failed to achieve the full potential of IT/IS. These failures can be attributed at least in part to a weak link in the planning process. That weak link is the IT/IS justification process. The decision-making process has only grown more difficult in recent years with the increased complexity of business brought about by the rapid growth of supply chain management, the virtual enterprise and E-business. These are but three of the many changes in the business environment over the past 10–12 years. The complexities of this dynamic new business environment should be taken into account in IT/IS justification. We conducted a review of the current literature on IT/IS justification. The purpose of the literature review was to assemble meaningful information for the development of a framework for IT/IS evaluation that better reflects the new business environment. A suitable classification scheme has been proposed for organizing the literature reviewed. Directions for future research are indicated.     

Investigating and comparing the dynamic patterns of the business value of information technology over time

The long-debated issue of the business value of information technology (IT) to the firm (country) has received a great deal of attention in the literature. But the studies have rarely examined the dynamic patterns of the IT value as measured by the firm’s productive efficiency over time. The objective of this paper is to apply the three-factor constant elasticity of substitution (CES) time-varying stochastic production frontier models and use the same data set as used in several previous studies to investigate the dynamic patterns of IT value over time in connection with the issues of inputs substitution and complement and the productivity paradox. This paper adopts two analytical skills, collective and individual, to analyze the empirical results. Collectively, we find that the dynamic patterns of IT value are closely related to the substitution and complement of three inputs and the IT productivity paradox. Individually, we identify five common dynamic patterns of the IT value measured by productive efficiency and interpret their implications for the productivity paradox as summarized in a two by two matrix of practical applications and strategies. This matrix accounts for four different scenarios of the relationship between the average productive efficiency and the IT productivity paradox, illustrates some practical applications by the analytical results, and provides some business insights and managerial strategies for IT decision makers and PO/IS managers. This represents a new contribution to the understanding of the dynamic influence of IT investments upon the value of IT over time.     

IS/IT项目选择决策的灰色逼近理想解排序法

IS/IT项目选择决策是一个多属性决策问题.针对传统逼近理想解排序法(TOPSIS)在确定属性权重系数上的缺陷,并考虑到在实际IS/IT项目选择决策过程中部分决策信息的不足,提出了基于灰色TOPSIS改进算法.算法运用区间灰数表达指标权重和指标评价值,定义备择项目与正、负理想解的灰色关联度,依此计算各备则项目的贴近度并实现最终排序.仿真实例验证了该方法的合理和有效性.     

The impact of information technology on the banking industry

This paper analyses the effects of investment in information technologies (IT) in the banking sector using bank-level data from a panel of 68 US banks over the period 1986–2005. Although IT can improve bank's performance by reducing operational cost (supply side), it can bring in competition among banks in order to embrace new technology (demand side). Since most empirical studies have adopted the production function approach, it is difficult to identify which effect has dominated. In a differentiated model with network effects, this paper characterizes the conditions to identify these two effects. The results suggest that (at individual firm levels) the bank profits can decline due to adoption and diffusion of IT investment, reflecting negative network competition effects in this industry. Using panel cointegration tests, we confirm that the estimated profit equation is indeed a long-run equilibrium relation.     

A decision model for interdependent information system project selection

Existing methods for information system (IS) project selection neglect an important aspect of information technology, namely the interdependencies that exist among various IS applications (projects). Recognizing and modeling these project interdependencies provides valuable cost savings and greater benefits to organizations. In this paper, an IS project selection model is developed that identifies and models benefit, resource and technical interdependencies among candidate projects. The proposed model is formulated as a nonlinear 0–1 programming problem and represents a significant addition to existing IS, capital budgeting and R&D project selection models. The model is converted, using linearization techniques, and tested (validated) by applying it to real-world IS project selection data. By comparing the performance of this model with existing project selection models, the contribution of this model is highlighted.     

Inadvertent leaks: exploration via agent-based dynamic network simulation

A significant volume of information leaks in organizations are inadvertent, a form of information spillage. Because the leakage of information is driven by the complex interaction of technology, social, and behavioral factors, we use a hybrid agent-based and dynamic network model, Construct, to simulate the flow of sensitive information in knowledge-driven organizations. Because interaction patterns often change when an organization is under stress, we simulate stress to the organization with effect-based (reliability and integrity) crisis scenarios. Using a virtual experiment, we vary the crisis scenarios, organization’s structure, IT connections, and pressure to separate personnel based on security ratings. Our experiment suggests that the organization’s structure, IT connections, separation pressure, and typical performance all influence how much an organization suffers from inadvertent leakage. In evaluating how organizations respond to crisis, organizations with stove-piped IT tend to clamp down on leakage in response to the crisis, while organizations with Mesh IT tend to have more leakage. Integrity crises tend to decrease leakage; while reliability crises tend to increase leakage in organizations, especially those with Mesh-based IT.     

Making the information systems outsourcing decision: A transaction cost approach to analyzing outsourcing decision problems

During the last several years outsourcing has emerged as a major issue in information systems management. As competitive forces impinge on business firms, senior managers are re-structuring their organizations with an eye on attaining or maintaining competitive advantage. Various strategies to IS outsourcing have emerged, for example, some outsourcers contract with a sole vendor while others contract with several. To date no studies have been done to determine which strategies are appropriate under what conditions. And while some firms have achieved varying degrees of success with any of these strategies, many have encountered significant difficulties. How then are managers to choose from a set of options that which is most appropriate for their firm? Outsourcing problems are complex and entail considerable implications for the strategy of the firm. A wrong decision can result in loss of core competencies and capabilities, and exposure to unexpected risks. Although many articles have appeared on outsourcing, few have extended the discussion beyond simple cost–benefit analysis. In this paper we discuss a transaction cost theory approach to the analysis of outsourcing decision making. Our approach provides managers with a strategy and techniques for analyzing some of the more subtle issues they may face when dealing with complex outsourcing decisions problems.     

Multiplex Multi-Core Pattern of Network Organizations: An Exploratory Study

Recent research on small-world theory has been expanded upon organizations behavior. However, most individual studies have taken a simplified view of individuals and relationships among members by focusing on a single type of links mainly within dyadic relationships. In reality, members of organizations are interacting with each other and often connected via many types of links within more complex relationships. To explore this complex interaction, this study models organization as network and proposes a multiplex approach that captures the complexity of relationships among members in organizations. This approach accounts for the multiple types of links among members and the multiple roles of members within network organizations. It is illustrated via a case study of a network organization. The case study demonstrates how this approach could capture the many types of relationship among members as well as the various roles that members play within the network organization. Such an approach can yield new insights on how to better manage network organizations.     

Managing risks in information systems outsourcing: An approach to analyzing outsourcing risks and structuring incentive contracts

Information systems outsourcing is now almost standard practice for many companies. Outsourcing the information processing activities is a complex issue that entails considerable implications for the strategy of the firm. An important mechanism for managing the performance of outsourcing vendors is incentive contracts. But to develop an outsourcing contract the IS manager must quantify risks and benefits. However methods and tools for analyzing and quantifying outsourcing risks that IS managers have at their disposal are rudimentary. In this paper we offer a method and some mathematical models for analyzing risks and constructing incentive contracts for IS outsourcing. We are aware that most managers do not like to use mathematical models, consequently we have minimized the technical discussion and have illustrated how this model could be implemented using spreadsheet software for ease of use.     

An agent-based model of organizational ambidexterity decisions and strategies in new product development

Organizational ambidexterity, defined as the pursuit of both exploitation and exploration, has become an important topic in the study of organizations, especially in innovation management theory. Previous literature has not focused on the strategic (game-theoretic) aspects of organizational ambidexterity or on its decision-making aspects. Little is known about how or even whether the decision to adopt ambidexterity is competitively advantageous in the presence of diverse strategies that competitors may adopt. This facet of the subject is inherently game-theoretic; the value of a decision by one firm depends in part on decisions made by other firms. This paper initiates systematic investigation of these strategic aspects, including the overall performance of available strategies. Specifically, this study examines questions of ambidexterity-related strategy performance in the context of new product development. The main contributions are (1) to introduce and make available to the research community an agent-based model and decision support system that captures many of the key aspects and tradeoffs, which have been identified in the literature, of the exploration–exploitation dilemma faced by firms in the new product development process, with a focus on organizations’ product investment decisions and (2) to report on results obtained from the model, calibrated with available data from the literature, augmented by new data collected from interviews with practitioners.     

A methodology for developing Bayesian networks: An application to information technology (IT) implementation

Bayesian Networks (BNs) are probabilistic inference engines that support reasoning under uncertainty. This article presents a methodology for building an information technology (IT) implementation BN from client–server survey data. The article also demonstrates how to use the BN to predict the attainment of IT benefits, given specific implementation characteristics (e.g., application complexity) and activities (e.g., reengineering). The BN is an outcome of a machine learning process that finds the network’s structure and its associated parameters, which best fit the data. The article will be of interest to academicians who want to learn more about building BNs from real data and practitioners who are interested in IT implementation models that make probabilistic statements about certain implementation decisions.     

The adoption of environmental and risk management practices: Relationships to environmental performance

The Strategic Goals Program sponsored by the United States Environmental Protection Agency which focuses on the Metal Finishing Industry is used to investigate some pertinent issues related to small manufacturing enterprises' environmental performance. Results from the initial years of this program are used to evaluate a number of hypotheses related to the relationship between environmental performance and adoption of environmental and risk management practices, especially among smaller organizations. The methodology uses unique structuring of data to determine temporal environmental performance using data envelopment analysis. Results show that early and increased investment in these practices and programs may not provide for better performance benefits. The findings have implications for environmental managers in smaller organizations and policy makers overseeing these types of organizations.     

Lean principles,practices, and impacts: a study on small and medium-sized enterprises (SMEs)

Lean as a business strategy is used to improve quality and service, eliminate waste, reduce time and costs, and enhance overall organizational effectiveness. Heightening challenges in competition in recent years have prompted many small and medium-sized enterprises (SMEs) to adopt lean to enhance firms’ competitiveness. This paper attempts to present an all-inclusive study and it examines various factors associated with the implementation of lean in SMEs in the U.S. The findings suggest that most of SMEs have a relatively accurate understanding of lean concept and philosophy. The primary reasons to implement lean are mainly internal, including reduce cost, improve profit margin, improve utilization of plant/facility, and maintain competitive position. A hierarchical cluster analysis was conducted to investigate lean status. It was discovered that both advanced adopters and beginners of lean are discovered. ANOVA test results show that there exist quite significant differences in terms of the degrees of lean implementation in SMEs. Varied lean tools and programs have been applied and they are positively related with firms’ performance. Lastly, the paper provides evidences that major lean barriers are encountered by SMEs regarding management or people related factors as well as key knowledge and know-how.     

A Dynamic Simulation Comparing Classical and Emergent-Network Models: Organizational Design Implications

In the last decade, organizations have spent more on the creation, transformation, and communication of information than on the production of physical goods. The information age has been ushered in by the widespread assimilation of information and communication technologies. Many contemporary practitioners and organizational theorists predict the demise of the classical organizational design because of its inability to accommodate the sociological change engendered by the information age.The current study advances an emergent-network model of organizational design and compares it to the classical approach through a dynamic simulation of prototypical organizational activities. Organizational activities approximating one year were simulated in each of five organizations under constant baseline conditions and over one hundred experimental design conditions. The emergent network model manifested higher levels of goal attainment, resource utilization, and organizational capacity for accommodating change. These findings suggest that organizations will benefit from conformance to the design principals of the emergent-network model.Bernard D. Hill Jr. earned his Ph.D. in Public Policy and Administration from Virginia Commonwealth University. He also holds a Master of Science in Business and a Bachelor of Science in Education. Bernard is currently employed as a Chief Information Officer with the Commonwealth of Virginia. He has held a broad array of technology leadership positions in both the public and private sectors and the academic arena. Bernard was selected as one of Computerworld’s Premier 100 IT Leaders for 2002. As CIO for the Virginia Department of Transportation, he also brokered a public-private partnership that won a nationwide Government Technology Leadership Award. This partnership provides security awareness training for employees in Virginia State government, as well as cities, counties, and localities throughout Virginia.Heinz Roland Weistroffer is an Associate Professor of Information Systems in the School of Business at Virginia Commonwealth University. Roland holds a Doctor of Science degree from the Free University Berlin, Germany, and a Master of Arts degree from Duke University. Previous appointments include Chief Research Officer at the Council for Scientific and Industrial Research in Pretoria, South Africa, and Senior Lecturer at the University of Natal in Durban, South Africa. Roland’s current research interests include computer assisted decision support, computer simulation modeling, object oriented modeling, and software engineering. He has published in IEEE Transactions on Software Engineering, IEEE Transactions on Systems, Man and Cybernetics, the Journal of Multi-Criteria Decision Analysis, and Socio-Economic Planning Sciences, among other journals.Peter Aiken is Director of the Institute for Data Research and an Associate Professor of Information Systems at Virginia Commonwealth University. His research has widely explored the area of data engineering and its relationship to systems and business reengineering. He is the author of Data Reverse Engineering and Clive Finkelstein’s co-author of Corporate Information Portals (McGraw-Hill 1996/99). His sixth book is titled XML in Data Management and is co-authored with David Allen. He has held leadership positions with the US Department of Defense and consulted with more than 50 organizations in 14 different counties. His research publications have appeared in the Communications of the ACM, IBM Systems Journal, IEEE Software and many others. He is a member of ACM, and the IEEE (Senior Member). He has been a DAMA International Advisor since 1999 and received their 2001 International Achievement Award. He has lectured internationally on these and related topics.     

The Malthusian parameter in microbial ecology and evolution: An optimal control treatment

There is a consensus among evolutionary microbiologists that the (quasi-)instantaneous specific rate of proliferation is a good measure for fitness. On the other hand, it is well known in evolutionary theory that the appropriate fitness measure is generally dependent on ecotype. We consider two ecotypes: one in which the instantaneous specific growth rate, discounted into the future, is an appropriate measure of fitness, and one in which fitness is measured as “ burst fitness” under intermittently favorable conditions. Our analysis is based on a standard model of microbial growth, the Droop Quota model, which we have extended with a variable balance between assimilation and proliferation, since this balance constitutes an important regulatory choice. We evaluate optimal allocation regimes and contrast these to control regimes based on maximization of the instantaneous specific growth rate.     

Implementation of Lean Six Sigma in small- and medium-sized manufacturing enterprises in the Netherlands

In this paper we provide an exploration and analysis of Lean Six Sigma (LSS) implementation in Dutch manufacturing/engineering small- and medium-sized enterprises (SMEs). Critical success factors (CSFs) and impeding factors are identified and analysed. Exploratory empirical evidence about LSS implementation in Dutch SMEs was collected from a survey study on Dutch SMEs. Statistical testing was applied to validate the ranking of the CSFs. To deepen insight in how organizations translate CSFs into practice and cope with impeding factors, additional in-depth qualitative information was gathered from six case studies. Linking to customer, vision and plan statement, communication and management involvement and participation are the highest ranked CSFs. Internal resistance, the availability of resources, changing business focus and lack of leadership are the strongest impeding factors. The case studies confirmed the importance of the CSFs and revealed three new CSFs: personal LSS-experience of Top management, development of the project leader's soft skills and supply chain focus. SMEs in the Netherlands make no distinct separation between lean manufacturing and Six Sigma, but rather apply both approaches intertwined.     

Innovation capabilities measurement using fuzzy methodologies: a Colombian SMEs case

The main aim of this paper is to establish the hidden incidences that can improve specific aspects of beekeeper Small and Medium Enterprises (SME) innovation capabilities in Boyacá-Colombia. The methodology is focused on the use of the expertons model, adequacy coefficient and forgotten effects theory. A questionnaire of 58 items about different innovation management areas is distributed to 14 beekeeper SMEs in the area of Boyacá-Colombia. The findings suggest that there are two specific actions that can improve innovation culture. These actions are related to marketing strategies and product innovation. The innovation strategy has a significant influence on the development of an innovative culture in the beekeeper SMEs; one must have a clear orientation to the innovation objectives in the marketing strategy, which is transferred to the product. Likewise, the utility of fuzzy methods for analysis when information is limited, subjective and scarce is highlighted. Finally, this research can be useful to practitioners and academics because the findings can serve as guidelines to understanding sources and enablers of innovation. In addition, the findings show how fuzzy methods help in contending with incomplete and subjective information, highlighting the meaning of the information rather than its measurement.

     

The relationships among virtual enterprise,information technology,and business performance in agile manufacturing: An industry perspective

Agile Manufacturing (AM) is a manufacturing paradigm that focuses on smaller scale, modular production facilities, and agile operations capable of dealing with turbulent and changing environments. From several enablers of AM, Virtual Enterprise (VE) and Information Technology (IT) were chosen. This empirical study explored the impact of the alignment between VE and IT on business performance in an AM setting for five different industries. Extensive data collection strategy and several tests were used to establish the reliability and validity of the data collected. Extensive analyses of the data using Structural Equation Modeling were performed for five hypotheses across five different industries. The results indicate that both VE and IT had positive influences on business performance for all industries. It was also established that the alignment between VE and IT had a positive impact on business performance for all industries. Further, it was shown that the impact of the alignment between VE and IT on business performance was more significant than the impact of VE and IT on business performance individually for all industries. The statistical analyses and results showed that there were no significant differences among the industries surveyed. At the bivariate level of analysis, some minor differences for one industry were highlighted. In conclusion, the assessment of the results along with future research directions is provided.