Merging the Business with the Information System

Harold Abraham

According to the Project Management Institute of N.A.

• $300 Billion a year is lost on late, over budget, or failed implementation of Information Technology.

• Information systems provide valuable information that assists managers in making decisions that increase revenue, or decrease cost

The Startling Truth is that:• 72% of IT projects are late, overbudget, lacking in

functionality, or never delivered.• Some become obsolete before completion.

• Only 28% achieve some level of success, and of these• 45% are over budget• 68% didn’t meet the implementation deadline

The startling truth is that (continued):

• 48% of IT projects never realize strategic value.

• 50% of managers say they could have realized value with only 50% of the cost.

The Perceptions of IS Solutions are

• That, on the surface, the systems seem to be a good fit.– They rarely are at the tactical level.– They are usually co-designed to meet the needs of personnel

that may not be around in the future.

Companies face obstacles such as• Nontraditional entrants with competitive offerings• Tighter Spending• New Technologies being developed all the time• Constantly changing customer demands

– And, higher levels of personalized preferences• Multiple pricing, service, and utility models• Gov’t regulations, legal compliance, and safety standards• Increased transparency due to blurring between

customers, competitors, and suppliers

Has the competitive advantage and revenue benefit been lost due to availability and

transparency? • Competitors are using similar systems to manage

revenue, store and analyze data, and control costs.

• Customers are also using information systems to drive down price in the market, and seek premium services with faster delivery times.

Cargo Revenue Optimizer (CRO)

• CRO takes past data from the previous three years and runs complicated algorithms to determine demand forecasts. It also uses this data to create hurdle rates that are fed back into our Logistics Management System, hosted by Unisys.

Current Information Systems in the Cargo Division for Delta Airlines

Future Information Systems in the Cargo Division for Delta Airlines

Has CRO become Obsolete for DL?• Current global economy is trending downward

• 2009 is seeing much lower demand than previous three years.– December 2008 & January 2009 are down more than 30% in

most sectors for the Cargo division at Delta.

• Data and trends will be altered in 2010, caused by poor 2009 performance.

On a global scale, the CRO System doesn’t factor

• Economic swings such as,– Foreign economies such as the EU affect Import/Export business– Currency fluctuations have an impact on revenue

• Import-Export Intelligence such as,– GDP or GNP considerations

Review• Information Systems are great for storing data and

providing fast supply of data for speedy decisions.

• Swings in business move much faster than technology.

• Sometimes the business becomes constrained by its information systems.– Support tables require maintaining.– The business must be able to react very quickly to protect market

share and the core business.

(Continued)• Nothing can replace the intuitiveness of a seasoned

analyst.– Intellectual Capital is the most important asset a company has.

• Historically, the IS discipline has struggled to embrace and integrate technical as well as organizational knowledge, skills and methods (Kawalek, 2008).

Conclusion• In order for information systems to be successfully

implemented, IT professionals must have skill sets that combine both the technical disciplines and the business disciplines.

• IT professionals must be able to define, organize, document, communicate, and manage the implementation of a successful solution with a cohesive team