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Information system, we have evaluated the role of information systems in growth and development of the organisation. We have also discussed how information technology has evolved over the period of time and effect of technology development on working with the organisation. For the purpose, such evaluation help of case study of the failure of IT projects in Jordon has been taken. Risk management related to information systems and technological development is also evaluated and recommendations for risk management have also given to minimise such risks.
Information technology has emerged and evolved in recent 50 years. Nowadays information technology is not limited to mobile phones and laptops of the population, it has extended its arms to various aspects of business and national security like modernisation of machinery in factories, project development, automobile industry, military applications etc. It is not limited to facilitating communication between people but, has evolved business models used by big organisations (Shaqiri, 2015). There are hardly any organisations which can survive in this competitive business environment without using information technology. With all these advantages information technology invites various risks in an organisation like security risks, compliance risk, security risk, compliance risk etc. In this report, we have analysed the effect of information technology on the information system and failure or success of an IS project of the organisation. All the issues are evaluated with the help of given case study of Jordan. This report also contains recommendation with the help of which an organisation can minimise these risks.
According to Bourgeois (2014), the information system can be defined as a network of hardware, software and networks which enable an organisation to collect, process, store, analyse and distribute data in an organisation. The information system of any organisation is developed with the help of 5 components that are hardware, software, network, people and process. Use of efficient and effective information system can be very useful for success and growth of an organisation. For example of efficient use of information system can be taken from Wal-Mart. Wal-Mart’s first introduced supply chain management system in 1980’s in which suppliers of the company can oversee the inventory stock and sales of Wal-Mart’s from any of their stock. The organisation has been continuously updating their information system and getting tremendous results. Information system also helps an organisation to gain a competitive edge in a business environment. It helps an organisation to –
1.Manufacturedgoods at lower cost and in limited time.
2.Creating a unique speciality for the organisation.
4.Saved time on operations can be used by the organisation to develop strategic management.
As per the views of Rodion (2014), data stored in the information system of an organisation is of utmost importance and if such data is hampered then it can lead to financial as well as a reputational loss for the company. Hence a company using IT in information system should have rigid and efficient information system management. Information security means protection of information available to an organisation from various threats to minimise risk level of organisation. The risk of information system can be divided by an organisation into 4 types that are management risk, financial risk, environmental risk and security risk. Organisation uses risk management tools to maintain a balance between taking the opportunity and avoiding vulnerability produces by such risk factors. The Information system can be very harmful for the organisation if proper information security and risk management is not adopted by the organisation.
Sweis (2015) have discussed various factors which are affecting the success of various information system projects in Jordon. According to him major three factors that lead to failure of an information system project are process driven, context driven and content driven issues. For determining more accurate results a research was undertaken in 17 public and private sector companies of Jordan. Questionnaires were provided to people working information technology department of these selected company. A total questionnaire distributed were 104 out of which 62 responded with a response rate of 58.7%. Some of the major factors which come forward after analysing the results of these questionnaires were poor communication within the organisation, a high degree of customised software’s, ignoring time limit for completion of the project, lack of involvement of the user in system development cycle and inaccurate estimation of resources available.
Every organisation have some sensitive information, if such information is destroyed or obtained by their competitors then it could affect the sustainability of an organisation (Schwalbe, 2015). Organisation depends upon timely, accurate, valid and relevant information for their daily operations. Some of the examples of sensitive information are as follows-
1.Strategic plans- a blueprint of new technology, launching information of new project etc.
2.Business operations- list of major clients, manufacturing cost of a product, expected to sell price of the new product.
3.Finances-salaries and wages of staff, product pricing methods adopted by company etc.
Information system Issues
According to Babaei & Beikzad (2013), issues related to information system can be divided into three categories i.e. human factors, organisational factors and environmental factors.
1.Less involvement of top management while development of information system.
2.Lack of knowledge about information technology.
3.Resistance to change in accordance with a change in environment.
4.Lack of communication between managers of organisation and developer of the information system.
5.Not properly understanding the needs of the information system of organisation.
1.Inadequate training to employees of an organisation to use information system.
2.Inefficient training and development programs.
3.Use of outdated and complex systems for data collection and processing.
4.Inadequate documentation process of organisation.
1.The regularrequirement for updating of an information system according to a dynamic environment.
2.Inaccurate estimation of business environment before Implementation of the information system.
3.Incorrect estimation of available resources.
Impact on organisation
Fast processing of data is very important for timely and effective completion of its daily operation. With the help of effective information system, an organisation can gain a cost efficiency advantage over its competitors. All the above-discussed issues will delay data collection and processing of an organisation which will result in losing a competitive edge in the market. Inefficient information system not only affects organisation at the operational level, it also affects decision-making process of a company. One of the main process information systems is record keeping of important information like financial information, product information, research results etc. This collected information’s helps the organisation to develop new strategies for growth and development of the organisation. Delay or inaccuracy in an information system can derail organisation from its predetermined goals and objectives.
One other objective of an information system is to communicate important data to the top level management. Timely communication of data is very important for operational aspects of organisation which can be affected by the inefficient information system.
Information Technology Issues
According to Mizoguchi (2012), risk related to emerging technology and regulatory requirement are increasing with emerging technology. IT related risk varies according to the business environment, technology used and business processes in an organisation are working. But some of the most common IT risks are as follows-
1.Social networking- Nowadays social networking is used by an organisation for advertisement, connecting with the end users and various other purposes. Any negative new about an organisation on social media can affect reputation and brand value of the organisation. It also increases the threat of leaking confidential information about the organisation.
2.Malicious software (Malware) - These are the software’s which are designed by the hackers to disrupt organisational working. It increases a risk of leaking critical information, impact on software and hardware of a company, financial losses etc.
3.End-usercomputing (EUC) - EUC is software in which users who are non-professional can develop software according to the need of an organisation. It increases the risk of the wrong generation of financial statement and other important reports generated from this software. It can affect decision-making process of an organisation.
4.Corporate espionage- These are the practices that are adopted by competitors of an organisation to gain some sensitive information and advancement of technology has increased such practices. This can result in financial losses, loss of credibility with customers.
5.Inefficient IT Governance-it governance plays important role in determining whether information technology will affect an organisation positively or negatively. Inefficient IT governance can result in duplication of work which will result in increased cost and time for an organisation.
6.Data management-Development of IT also can affect data management of an organisation negatively. It can result in various IT threats like hacking, wire tapping, piggybacking etc.
Impact on organisation
Any of the above risks can have financial as well as non-financial effects an organisation. Some of these effects are explained as under-
1.Financial loss-it is the expenditure done by an organisation towards the damages of these risks like repair of hardware, replacement of security software, legal cost etc.
2.Legal effect-if security measures adopted by the organisation are not sufficient then may expose itself towards lawsuits and legal actions from their investors of the insurer.
3.Loss of credibility- for success in any business environment a company has to keep its credibility with the customers. IT risks can have an adverse effect on credibility and reputation of the organisation.
4.Disclosure of confidential and sensitive information to competitors.
Impact of Information System on various aspects of business
With the help of Jordan case study and Information system risks evaluated above we can say that IT has affected every aspect of business. These impacts have both negative as well as positive effect on the performance of an organisation (Sweis, 2015). Emerging technology has resulted in better software, improves data storage capacity, quick data processing, better information communication channels etc. now we have discussed three important aspects of business and how they are affected by information technology.
In the time of recession, increased competition, inflation etc. an organisation always tries to adopt a new business strategy to gain a competitive edge over other business in the industry. One of such strategy is the use of information system (Çakmak, 2016). An effective information system helps the organisation to use its available date effectively and reduces the time taken in data processing. Information system has affected various important processes of an organisation some of which are
1.Information storage and processing-In recent time most of the organisation has shifted its method of data management from manual to computerised system. With the help of computerised systems, a company can use such data to solve different problems faced by it. The information system can collect data from within as well as outside of the company, so an organisation could have more accurate data as compared to in manual systems.
2.Preparation of business plans- information systems is also used by the organisation in strategic decision-making process in an organisation. The information system can collect data from external sources like Bloomberg to evaluate economy so that proper decisions could be made for growth of the company.
3.Others- information system has helped an organisation in simplification of business processes and avoid unnecessary efforts. A process for employee recruitment, project development, preparation of financial reports and other relevant reports have become very easy with the help of Information system.
According to Berisha-Namani (2010), in earlier time information system was used by an organisation in making operational decisions only. With the advancement of the information system, organisations are also using IS regarding management decisions. Management of an organisation are able to retrieve relevant data much faster and due to the reliability of such data important decisions can be taken depending on it. Data collected by IS will be useful only if management of the organisation is able to define its requirement properly and clearly. The reliability of the source of such data should be properly evaluated by the organisation before using it in management decisions as it could lead to deviation from organisational goals and objectives.
Supply Chain Performance
According to Samadi & Kassou (2016), effective supply chain management in an organisation can give a competitive advantage to an organisation which is required for growth and development. Supply chain performance refers to the activities like storage of raw material, logistical activities etc. as per the need of the end user customers. In manufacturing industries best way to gain more profits is through reduction of cost. They conducted a research in which they evaluated that information system of an organisation has both direct and indirect impact on the supply chain performance of an organisation. Information system provides accurate and timely information related to cost to help an organisation in cost cutting. The information system has helped the organisation in automation of transfer of documents between customers and suppliers through electronic modes.
In this report, we have discussed the impact of information system and information technology on various aspects of business and risks related to such technological advancements. We can conclude from the above report that IT and IS are very important for development and growth of an organisation. But these advantages come with various threats which can even affect the existence of business. Therefore an organisation must use this advancement but it should also develop an effective Risk management system to avoid threats generated by them.
An organisation can adopt following recommendations to minimise the effect information system and information technology risks-
1.In the given case study one of the major risk factors that affected the IT project was excessive customization of Information system software. This can be handled by an organisation is through developing software’s with the help of professional software developers and following appropriate models of System development life cycle.
2.Another major challenge for IT projects was less involvement of managers of the organisation in the development of Information system. Organisations can form a steering committee for proper management of system development. This committee should include managers from both IT department and management of the organisation. This will result in a system which has technological advancement as well as proper managerial aspect.
3.Managers should evaluate the current situation of information system in organisation and define issues with current arrangement clearly. While proposing the requirement for a new information system to the professional software developer, the organisation should include these two factors.
4.Timeline of the project should be properly estimated keeping in mind the factors like working position of the current system, any new project to be started, workforce available etc.
5.There should be proper reporting and documentation process for information system development so that there is transparency in the development process. Organisation should also ask for system manual for a new system so that any issues that could occur in future can be handled efficiently by user organisation.
6.The companyshould follow frameworks of ISO 9001, ITIL, COSO etc. which are very effective for risk assessment and risk management. This will enable the organisation to follow a structured and predefined framework.
7.Proper security measures should be taken by the organisation to protect its information system as it contains sensitive information. Organisation can install a biometric device at the entrance of the office building so that only authorised person is allowed. For the protection of systems in the organisation should install security software, PIN, passwords, bar code etc.
8.Physical security of systems is equally important as digital security. Organisation should install proper physical security measure like security guards, CCTV etc.
9.For organisations like banks and financial institutions, security of network lines is very important. There are various incidences in which organisations suffer financial losses due to hacking and trap doors. The company should make their network lines secure to avoid financial as well as loss of reputation.
10.Training of IT staff is also very important risk management policy. New employees must be made familiar with the risk management practices of the organisation. There is always an inherent risk factor with the business which cannot be predicted by the organisation. Therefore business insurance is the very important to practice of risk management policy of any organisation. Organisation should review these policies at regular interval and modify it accordingly.
1.Babaei, M. & Beikzad, J. 2013, “Management information system, challenges and solutions”, European Online Journal of Natural and Social Sciences, vol.2, No. 3(s), pp. 374-381.
2.Berisha-Namani, M., 2010. “The role of information systems in management decision making- An theoretical approach”. Manager (University of Bucharest, Faculty of Business & Administration), (12).
3.Bourgeois, D.T. 2014, “Information Systems for Business and Beyond”, The Saylor Academy.
4.Çakmak, C. 2016, “The Role of Information Systems in Business Process Redesign”, Master Program in Information Management.
5.Mizoguchi, T. 2012, “Information Technology Risks in Today’s Environment”, Deloitte & Touche LLP.
6.Rodion, Z. 2014, “Analysis of information risk management methods”, Jyväskylä: University of Jyväskylä.
7.Samadi, E. and Kassou, I., 2016. “The Relationship between IT and Supply Chain Performance: A Systematic Review and Future Research”. American Journal of Industrial and Business Management, 6(04), p.480.
8.Schwalbe, K., 2015. “Information technologyproject management”. Cengage Learning.
9.Shaqiri, A.B. 2015, “Impact of Information Technology and Internet in Businesses”, Academic Journal of Business, Administration, Law and Social Sciences IIPCCL Publishing, Tirana-Albania, Vol. 1 No 1, pp73-79.
10.Sweis, R.J. 2015, “An Investigation of Failure in Information Systems Projects: The Case of Jordan”, Journal of Management Research, Vol. 7, No. 1, pp173-185.