Information Systems Management: Opportunities and Risks

255 Pages·1991·26.641 MB·English

by  Ian O. Angell, Steve Smithson (auth.)

Information Systems Management
Opportunities and Risks
InforDlation SysteDls
ManageDlent
Opportunities and Risks
o.
Ian Angell
Steve Smithson
Department of Information Systems
London School of Economics
Macmillan Education
ISBN 978-0-333-53681-0 ISBN 978-1-349-21555-3 (eBook)
DOI 10.1007/978-1-349-21555-3
© I. O. Angell and S. Smithson 1991
All rights reserved. For infonnation. write:
Scholarly and Reference Division.
S!. Martin's Press. Inc .• 175 Fifth Avenue.
New York. N.Y. 10010
First published in the United States of America in 1992
ISBN 978-0-312-07941-3 (paperback)
Library of Congress Cataloging-in-Publication Data
Angell. Ian O.
Infonnation systems management: opportunities and risks / Ian O.
Angell. Steve Smithson.
p. em.
Includes index.
1. Infonnation resources management. I. Smithson. Steve. 1949-
. II. Title.
T58.64.A44 1992
658.4'038-dc20 91-46131
CIP
Contents
Preface vi
1 Introduction: the need for balance 1
2 Understanding information systems 12
3 Strategy and tactics 29
4 The organization of the information systems function 52
5 Information technology and information systems 77
6 The integrity of information systems 94
7 Databases and the management of information 115
8 Data communication and network services 128
9 Office information systems 146
10 Information systems development 166
11 Evaluation, monitoring and control 189
12 Managing function and phenomena 213
List of abbreviations 228
Index 230
v
Preface
Managers of Information Systems (IS) are being pulled in two directions. On the
one hand within much of the information technology (IT) industry, the' Spirit of
the Age' is still one of unbridled hype and optimism, where computer-based
systems are seen as a first response and an instant solution to any problem.
Information technology is promoted as an agent of change that can deliver
competitive advantage in terms of better quality products, enhanced control,
reduced costs and increased flexibility. On the other hand, there seems to be no
sign of any let-up in the 'horror stories', and the consequences of faulty
computer-based systems still grab the newspaper headlines. In Paris, in
September 1989, the Court computer mailed out 41,000 summonses for parking
violations. Due to a mistake, or perhaps to a deliberate act of malice, the actual
summonses sent were for prostitution, living off immoral earnings, burglary, even
manslaughter. Pandemonium resulted from the embarrassment and family
recriminations heaped on these victims of circumstance. We should not be
surprised, such examples are legion: a few weeks later a British bank
inadvertently transferred two billion pounds in less than half an hour to various
international institutions; luckily the money was returned.
IS managers have to steer a difficult course between the 'hype' and the
'horror'. It could be argued that this situation is not new, it was the case ten (or
even twenty) years ago; computer salesmen were just as plausible then and
information systems failures also made the headlines. However, we would
contend that the situation is rather different today. Firstly, the risks are much
greater as systems become larger, more integrated, and thus more complex, so
that it is very much more difficult to isolate particular failures and to limit the
'knock-on' effects. Furthermore, organizations have become more vulnerable;
many depend crucially upon information technology because their basic
transactions and much of their more sensitive information is now held on
computers. Secondly, information technology is no longer 'new' and, whilst past
mistakes could be written off against experience, we should now be seeing
organizations using the technology in a mature fashion. The 'stage' theory
(Gibson, C.F. & Nolan, R.L., 'Managing the four stages of EDP growth',
Harvard Business Review, Vo1.52, No.1, Jan-Feb 1974) suggests that by now
most organizations should be managing their 'information resource', rather than
trying to control errant application programs. Many IS managers, who were told
that they would be managing change, find instead that they are managing crisis,
a crisis of control.
vi
Preface vii
We will try to give substance to the often unexpressed fears and uncertainty
felt by many user managers and IS managers, and by laying the issues before
them, guide them towards sensible decisions. We will question the limits of this
technology in the managerial context, but leave it to individual managers, in their
own particular situations, to decide what is appropriate and inappropriate for their
organization's specific needs. Our aim is to encourage the 'thinking manager'
towards a more critical evaluation of computer-based IS. Notwithstanding the
countless books and articles emphasizing the benefits of IT, our message is that
decision-makers must re-examine the assumptions under which systems are
justified, and they must become aware of the risks inherent in the introduction
of information technology and balance them against the many benefits.
Above all, this book is about balance. It is about recognizing the 'pros' and
the 'cons' of applying computers. Managing computerized information systems
will involve capitalizing on the many opportunities made available by IT to the
benefit of the organization, while at the same time avoiding the risks that can be
detrimental to its well-being. In this respect, and as a general principle, the
management of IS is little different to other areas of management. However,
where it does differ is in coping with the all-embracing systemic nature of
information, and with the effective use of this resource in dealing with the
uncertainty that pervades every aspect of the commercial environment.
With this message of balance, we have organized the book into twelve
chapters, starting with an introduction that lays out the scenario of opportunity
and risk in information systems. In Chapter 2, we propose a theoretical basis for
understanding and managing this opportunity and risk, while Chapter 3 describes
the concept of strategy as a sensible approach to the management of IS. The
organizational issues· of IT are considered in Chapter 4, and the effects on, and
maintenance of, the integrity of an organization and its information systems are
outlined in Chapter 5. Chapter 6 examines the promises and pitfalls of
information technology in the context of information systems. Chapters 7, 8 and
9 discuss the key infrastructural technologies of databases, networks and office
information systems. Chapter 10 considers questions of the development of
information systems, and Chapter 11 discusses the evaluation, monitoring and
control of operational systems. In Chapter 12 we culminate with a look at the
need for people amidst all this automation, and finish with an unequivocal
recognition that the successful implementation of computer-based information
systems is totally dependent on quality human intervention.
Top quality management and staff, well trained and highly motivated, can
harness the power of the technology to provide a range and quality of services,
undreamt-of a few years ago. Without such people, and without the technology,
organizations are on a road to nowhere.
1 Introduction: the need for balance
• The crisis of confidence
• Systemic risk
• Complexity
• Uncertainty
• The introduction of information systems
• Measurability, Predictability, Rationality
• Coping with the crisis
The crisis of confidence
Throughout a large number of very different industries, IT decision-takers are
confronting a growing crisis as the time approaches to authorize new computer
based information systems. Here, we use the term 'crisis' advisedly. The Oxford
English Dictionary defines crisis to be: A vitally important or decisive stage in
the progress of anything; now applied in times of difficulty, insecurity and
suspense in politics or commerce. To psychologists a crisis is: when the
individual is in a situation where past experience and old reaction patterns are
no longer adequate. A time of danger and suspense. In medicine it is: a point in
the progress of a disease when a development or change takes place which is
decisive of recovery or death; a turning point for better or worse.
The backdrop to this situation is a widespread faith, throughout much of
industry and academia, in the inherent virtue, almost omnipotence, of the
technology. Despite a whole catalogue of incidents, businesses are still
encouraged to seek the 'Holy Grail' of competitive advantage through the
employment of this seductive technology [1]. Yet, they are rarely warned that
they may be unwittingly gambling with their futures. Since the earliest days,
there has been criticism of the self-proclaimed benefits of computerization
(Ackoff [2], Roszak [3], Weizenbaum [4]), but these have largely been ignored.
Newspapers, television, radio and film stress, explicitly and implicitly, the merits
of computerization. Governments invest huge amounts in computer education and
in high-technology industrial collaboration. But computing has often not lived up
to expectations and there is a sense of irritation, even dissatisfaction, in the
business community. Is it right that this self-evident certainty goes unchallenged,
1
2 Information Systems Management
or have we reached that decisive stage in the development of information
technology, a time of difficulty, insecurity and suspense, a time of crisis?
Is this a turning point, for better or worse? Much will depend on the
recognition of many more variables and marginal issues within information
systems. The recognition of this crisis and its implied new behaviour patterns will
not be easy for managers of information systems, who have been trained in the
technologies and machine-centred requirements of the past. Awareness of the
crisis is vital, even for those that are at present successful users of information
systems. For the indications are that organizations cannot rely on past experiences
and old reaction patterns for future success: a totally new mode of IS
management is needed.
Systemic risk
It is not enough to apply traditional cost-benefit analysis to IT projects. As well
as to appreciate the opportunities attached to the project, it is important to
analyze the risks. These risks are usually associated with systems' failures or
unforeseen adverse consequences of the introduction of new information systems.
Such risks seem to be endemic to information technology. For example,
American Airlines clearly gained a major commercial advantage and substantial
income with their SABRE Reservation System. Unfortunately together with this
success is the possibility of major unforeseen legal battles over unfair
competition, with huge financial liabilities. The airline also lost fifty million
dollars by flying planes well below capacity, when customers were transferred
to their competitors after a software bug incorrectly informed booking clerks that
aircraft were full!
Systemic risk is a result of the complexity implicit in all large systems, but
particularly in socio-technical systems where people interact closely with the
technical system. This realization is not new. Murphy's Law "if it can go wrong,
it will go wrong," and the accompanying lemma "Murphy was an optimist," sums
up the situation succinctly. No technology always behaves in the way we expect
and believe it should; instead it almost appears to have a destructive purpose of
its own: 'Gremlins'. Gall, in his highly amusing book Systemantics [5], gives
many examples where blind optimism and a lack of understanding of the way
that systems function have led to devastating conclusions and, with tongue in
cheek, he outlines a number of profound 'laws' relating to the misbehaviour of
systems. It is a surprising side of human nature that we treat the inevitability of
uncertainty with humour. Perhaps this is the mechanism that has made the human
race so successful in dealing with these dilemmas. And we have been successful,
although, to listen to some proselytes of artificial intelligence and decision
analysis, we would gather that humans are somewhat inadequate in this respect.
Introduction: the need for balance 3
Complexity
Sheer complexity, not just in the technology itself but in its interaction with any
application environment, throws up inevitable, yet unpredictable, emergent
phenomena, many of which are likely to cause problems. The KISS advice, Keep
It Simple, Stupid, is too often ignored in the grandiose schemes of managers who
seem to be chasing the glamour and kudos of advanced technology. In both the
USA and UK numerous large military 'command and control' systems have run
into severe problems. Barclays Bank in the UK abandoned two multi-million
pound projects. Perhaps, as has been suggested, we should emulate successful
Japanese companies and use infonnation systems that are simpler and more
selective than those presently used in the West.
Previously seen only in tenns of its many benefits, the convergence of
computer and communication technologies could very well be 'an accident just
waiting to happen'. Rather than a communications network spanning the world,
with Open Systems Interconnection (OSI), we could be building a spider's web,
a trap of unimaginable complexity; a tangled web that the manufacturers seem
very keen to promote. "Communications is the heart of AT&T's business. And
technology is our lifeblood. We see our job as connecting people to people,
machines to machines, systems to systems, unhindered by geographic and
technical barriers" (AT&T advertisement). Technocrats, businessmen and
politicians are launching technological monsters into our society, in the arrogant
belief that because they initiate a system, they somehow control its evolution and
its resultant effects. The short-sighted leading the blind!
Commercial and social pressures, cultural incompatibilities, chaotic changes,
resistance to change, unpredictable accidents, criminal intent, malice and sabotage
add to the already excessive complexity, and can have surprising effects on what
are usually considered technological decisions. For example, electronic mail has
many benefits, yet it has well-documented negative effects: the danger of reduced
social interaction; magnetic disk stores filled to capacity with multiple copies of
unread messages; hours wasted reading 'junk mail'; and possibly worst of all
there is 'flaming', where carelessly phrased messages on trivial matters
precipitate aggressive responses, and a feedback of antagonism that can cause
major social disruption within an organization.
Another aspect of infonnation technology that is rarely fully appreciated is
the sheer scale and complexity of the administration needed to maintain an
infonnation system, including everything from maintaining the integrity of a file
base to satisfying the requirements of data-privacy legislation and safeguards.
Taken to excess, a rigid electronic bureaucracy prepares fertile ground for
Parkinson's Law: "Work expands so as to fill the time available for its
completion" [6]. A rigid bureaucracy can enforce a straitjacket of short tenn