SPSD Lecture 4 Benefit

7/23/2019 SPSD Lecture 4 Benefit

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Organisational Benefits from IS/IT:

The Index Matrix

Dr Alan Eardley


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Module Code and Module Title Title of Slides

Benefits can include the following:

Direct !enefits " easy to measure

" increased !usiness efficiency

" reduced system costs

" increased out#ut or turno$er Indirect !enefits " may !e long term

" !etter decision/communication #rocess

" !etter wor%ing conditions

" su##ort for s#ecific strategy/o!&ecti$e

" #roduct/ser$ice inno$ation

" 'cor#orate image(

" future o#erational flexi!ility


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Direct )osts " easy to measure *

De$elo#ment costs

" users( time + effort

" analysts + software designers( time + effort

" hardware/software s#ecification + tendering

Im#lementation costs

" hardware/software ac,uisition

" commissioning + installation

" training +/or recruitment

" design + coding

" data!ase creation

" system con$ersion


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Direct )osts " easy to measure -

.unning costs" maintenance + consuma!les

" financing charges

" salaries + charges

" security + ser$ice charges

ote the conce#t of 'total lifecycle costs( or 'total costof ownershi#( 0MS1

)an you &ustify in$esting in a new system when anexisting one is achie$ing maximum !enefits2


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The 'Total System( 3ifecycle

gain

loss

1 2 3 4 5 6 Years

System A System B System C

Maturity Phase

Develoment

Phase

!"oing #ive!


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Intangi!le )osts 4 long4term + 'hidden(

Switching costs" incurred in changing from system/#latform etc5

" may include disru#tion6 user/customer discontent

3oc%ing4in costs" caused !y ma&or strategic choice 0eg of $endor1

" relates to commitment o$er time

O##ortunity costs" caused when any strategic choice is made

" com#ared with alternati$e in$estments

IS/IT #lanning today #laces more em#hasis on indirect/intangi!le

!enefits + costs


7/14Module Code and Module Title Title of Slides

Organisational Benefits from IT

7hat organisational !enefits underlie the IT

o##ortunities2

8ow can the !enefits !e categorised to understand +manage them !etter2

8ow can the #redicted !enefits !e ensured2

There is a need for a tool that doesn(t focus on

financial measures



The Index Matrix

De$elo#ed !y the )S) Index 9oundation:

laces !enefits in the following categories: Efficiency ; 'doing the thing right(

Effecti$eness ; 'doing the right thing(

Transformation ; 'doing things !etter(

8igher le$el !enefits are identified at the!ottom line of the matrix



The Index Matrix

Beneficiaries of #lanned IT de$elo#ment: Indi$idual ; 'stand4alone(6 limited !enefit

9unction ; a##lies to function/di$ision

Organisation ; whole organisation !enefits

Benefits are more im#ortant to the right side

)ould there !e another column to the right2



The Index Matrix

Bene$i%iary

Bene$it &n'ivi'ual (un%tion )rganisation

*$$i%ien%y

*$$e%tiveness

+rans$ormation

tas,

automation

ro%ess

automation

organisational

integration

-or,

imrovement

$un%tional

imrovement

servi%e

enhan%ement

role

enhan%ement

$un%tional

re'e$inition

ro'u%t

innovation



The Index Matrix

se the matrix to 'im#ro$e( the categories 0i5e5 to the !ottom1 and to's#read( the !enefits from IS/IT 0i5e5 to the right1 as widely as#ossi!le 0e5g5 through internal integration1

7hat is the effect of the 777 on this2



The ?rowing eed for Integration

&n%reasing nee' $or systems integration&n%reasing nee' $or systems integration

Centralise'

%omutingDistri.ute'

%omuting

/.i0uitous

%omuting

Mainframe

Batch

)entral control

etwor%s

)lient4ser$er

Data!ase

E.6 @a$a

E4commerce

Mo!ile systems

Social networ%s

13s 143s 13s 2333s



Ma%ing IT Benefits 8a##en 4 ey 9actors

External focus" 'scan( for worthwhile '#ayoffs(

'Added $alue(

" rather than cost reduction only

Shared !enefits" more sta%eholders gi$es more !enefits

)ustomer focus + in$ol$ement" understanding customer needs/wants is $ital

Most failures in using IT are often based on much better IT & badbusiness visions. Successes come from good enough IT & a clear

understanding of the customers needs. eter een



lan for Achie$ing IS/IT Benefits

Identify current role of IS/IT a##lications

Identify future IS/IT o##ortunities

lan new IS/IT a##lications + de$elo#ments

Identify + #lan !enefits + transformations De$elo# IS/IT strategies in line with the

organisational/!usiness strategy

7e need to ma%e sure we can de$elo# the

transformation !enefits " they are the most

!eneficial to most organisations

Documents

SPSD Lecture 4 Benefit