The Information System Investment Problem

Information Technology is one of the top 10 management problems in the 20th century enterprise!

Most enterprise information systems are sold by vendors who promise many benefits. Few Enterprises really understand how to gain from the system. Enterprise system implementation is a large undertaking. Invariably, system implementation is restricted to putting the system into operation for the existing business. Even if the objective of system acquisition was business improvement, the objective usually gets redefined to “implement the system”. The enterprise is left on its own to make business changes to gain benefits from the system.

Most implementation consultants employ a methodology that allows them to implement systems with staff that do not need to understand the enterprise business. The emphasis is on “doing what the customer wants” and satisfying “user requirements”, which is difficult to argue against. The administrative department is defined as the “user”, rather than result users, who use the system to produce results or face the customer. Usually, the main requirement of the administrative department is “no change”. These “users” often benefit from existing methods, and cannot visualize advanced ways to utilize systems to benefit other users. To minimize problems and delays in implementation, methodologies convert existing practices and utilities convert existing data. Some Enterprises adopt “best practices” embodied in the enterprise system as a utilization strategy. But, implementation rarely puts “best practices” into actual operation. Utilization to achieve benefit is “up to the users” meaning result users. Training covers system operation rather than using the system for business benefit.

Many enterprises view system performance as a responsibility of Information Technology (IT). But, IT will take responsibility only for the internal operational performance of the system as it is set up. Problems exist because neither IT, nor anyone else, was ever made responsible for the business benefit provided by the system. Enterprises often try to solve the lack-of-business-benefit problem with new more-complicated systems, rather than solving the IT problem and improving the utilization of existing systems.

Most enterprise system implementations are “cost projects”. Implementation itself provides little benefit to the real users and limited return on the investment. Enterprise performance problems are converted to the new system — in effect casting the problems in concrete — making change much more difficult and escalating the cost of future performance improvement.

The Information System Investment Solution

Investment in enterprise systems and technology must be to enable significant result and performance improvement and not be an end in itself. System performance is a management responsibility to utilize the system to achieve business results. IT performance is the responsibility of IT to deliver accurate data, information, and knowledge to support achieving results.

Business Process Management, Capital Management, Benefiting from Business Change, Information System Implementation, Investment Management, Packaged Solutions, Solution Implementation

The solution is through Result Performance Management to understand and plan significant result and performance improvements using the system as the enabling technology. Result value-added provides the justification and payback for enterprise systems. Result Performance Management addresses the results the enterprise must achieve utilizing the system. Performance problems are analyzed to make beneficial business changes that maximize the functionality of the system and create an integrated enterprise information base. Application systems are not addressed as performance solutions, but as a component of the business process solution. The application is first integrated into each business process utilized to produce results. The improved business process is then implemented to produce higher value-quality results.

Result Performance Management provides many features to ensure successful system investments.

• Information is organized and managed as capital, not as technology
• Information system capital is split between business capital for the application logic and processing and data utilization, and facility equipment for the service architecture
• Systems are never implemented directly, but are implemented as part of an improved business process
• System investments are analyzed and planned as a part of improved business process solutions to produce itemized result value-added
• System utilization to produce result value-added is mandated by result manager goals and business performance manager follow up

Result Performance Management takes the mystery out of system investments and provides a disciplined path to gain a documented and planned return.