Public Sector
Information Resources in the Coming Millennium:
A Management
Imperative
Mary
Maureen Brown, D.P.A.
University
of North Carolina at Charlotte
In
the coming millennium organizations will continue to witness the strain of
escalating customer demands. In an effort to address increasing
expectations, theorists predict that organizations will evolve into a
“continuous improvement” paradigm. The paradigm espouses flattened
organizational structures, proximity to the customer, and decentralization of
assets and resources. These organizational characteristics provide the
ability to continuously improve services to meet shifting customer
preferences. Because of its ability to quickly capture, isolate, array,
and communicate service delivery information, the effective use of information
technology is pivotal to the continuous improvement organization. This
paper considers the role of managing information resources under the continuous
improvement paradigm. Specifically, the paper examines the critical role
that general managers and business executives play when implementing
technological innovations under a continuous improvement paradigm.
Sweeping changes in organizational life
are occurring in tandem with the arrival of the next millennium. Caught
in the shift from an industrial to an information centered economy, many of
today’s public and private organizations are transitioning to meet the demands
of tomorrow’s knowledge-based society. Purportedly, service goals will be
met through a “continuous improvement” approach to organization (Mechling and
Fletcher, 1996; Drucker, 1996; Martin, 1995). According to proponents,
the continuous improvement model allows organizations to meet escalating and
evolving customer expectations. The continuous improvement paradigm
espouses flattened organizational structures, proximity to the customer, and
decentralization of assets and resources -- techniques that allow a rapid
response to shifting customer desires.
Through its ability to store, forward,
retrieve, and distribute organizational information, information technology
provides a critical support structure for the continuous improvement
paradigm. As early as 1969, Peter Drucker forecasted that information and
its requisite technology would become “the central capital, the cost center,
and the crucial resource of the economy” (p. 264). Twenty-five years
later Drucker (1995) continues to speak to the important role information
technology (IT) plays in supporting organizations in their quest to adopt a
continuous improvement approach to providing products and services. A
recent Department of Commerce (1997) report on information technology sales and
occupational growth rates tends to support Drucker’s assertions. Between
1988 and 1995 IT sales grew 14 percent in constant dollars (Department of
Commerce, 1997). G2 Research (1998) forecasts that total annual spending
on information technology will top $500 billion by the year 2000. Recent
statistics indicate that the computer industry comprises roughly 10 percent of
gross domestic product in the United States and is larger than auto, steel,
mining, petrochemical, and natural gas industries combined (Tapscott and
Caston, 1993). Based on the current growth rate, the Department of Commerce
predicts that one million new IT workers will be needed before the year 2005
(Department of Commerce, 1997). Boettinger (1984) claims that by the turn
of the century 66 percent of the United States work force will be dedicated to
information related professions.
Seeking to explain the factors that
undergird the continuous improvement philosophy, researchers point to
technology as a catalyst for improving service delivery. Yet, for many
organizations, technological innovations do not come easily. While the
benefits of technology are often touted, more rigorous evaluations suggest that
technology projects typically experience high failure rates (Cats-Baril and
Thompson, 1996; Keil, 1995; Davis et al, 1992). As a point in case, in a
recent study the Standish Group (1995) found that only 16 percent of
information technology projects are completed on time and on budget.
According to the Standish Group study, roughly fifty percent of IT projects
exceed original cost estimates by 200 percent. Furthermore, in 1995
alone, $81 billion was spent on canceled technology projects (Standish Group,
1995). While, investments in information technology can yield high
returns, they too often involve assuming unacceptably high levels of
risk.
To date, previous research has focused on
the critical role of management commitment in adopting technology
initiatives. After begging the question “Whose responsibility is
information technology management?” Boynton et al. (1992) claim that system
development efforts are best led by line managers who thoroughly understand the
business operation. They go on to claim that senior managers must
carefully allocate responsibilities among technology managers and general
managers if they are to achieve the benefits of information technology.
While studies have illustrated the importance of management involvement, few
have isolated the actual role of the general manager in the technology adoption
effort. Complicating matters further, many general managers feel
ill-at-ease in assuming responsibility for information technology
efforts. In a recent survey of 85 senior executive service employees only
seven percent (N = 6) stated that they felt comfortable with having
responsibility for a technology initiative (Brown, 1998).
The focus of this research is to examine
the role of the general manager as it relates to information technology efforts
in a continuous improvement organization. The discussion that follows
centers on the instrumental role that general managers play in technology
innovation. Specifically, the paper provides insight on why continuous
improvement organizations will look to general managers to support technology
initiatives. Further, the paper will also discuss how these managers,
many of whom lack technology expertise, can leverage their talents to mitigate
the problems often encountered in technology adoption. In short,
organizations that successfully mitigate the risks associated with implementing
technological innovations will thrive in the coming millennium, and those that
do not will experience disintegration and decay. Organizations that
thrive will do so by taking advantage of the talents that general managers can
provide to their information system adoption and implementation efforts.
The Next Millennium:
The Shift Toward A Continuous-Improvement Paradigm
Contemporary scholars predict that, due to the competitive advantages that technological innovations allow, organizations will adopt a continuous improvement approach to providing products and services (Drucker, 1995; Tapscott and Caston, 1993). Many researchers point to the rise in technological innovations as the primary catalyst for the shift to the new paradigm. According to these theorists, innovations in computer and communication technologies are stimulating competition in two fundamental ways. Technological advancements have expanded the scope and size of the market, and increased market expectations (Davenport, 1993; Keen, 1991; Martin, 1995).
Ongoing advances in information systems and
communication technologies allow organizations to achieve greater levels of
productivity, efficiency, and service delivery. Information technology
also allows organizations to enhance productivity, gains which are often passed
on to the customer through improved service delivery. Through technology,
task cycle times are reduced by eliminating intermediaries, or steps in the
work process (Dawes et al, 1997). For example, one electronic mail
message replaces the dictation of a memo which is then typed, copied, and
distributed. Electronic work flow processing allows operational reports
to be stored and forwarded to appropriate units for follow up without a host of
manual intervening steps.
Further, because of technological and
communication innovations, geographic boundaries that once defined a customer
service jurisdiction no longer apply. The move toward distance learning
provides an excellent example of how organizations are no longer restricted to,
or guaranteed the market base of, a contained geographic boundary.
Many universities have begun offering courses over the internet. Students
who were previously restricted to regional state university offerings can now
pursue a degree from these on-line universities irrespective of where the
student resides. Given the advances in communication technology, students
and universities alike are no longer regionally bound.
The continuous improvement approach
argues that organizations in the next millennium must incorporate technological
and structural arrangements that facilitate change and innovation. To
respond more quickly to changes in customer needs, continuous improvement
researchers stress the importance of flattened hierarchies and autonomous
decision structures. A high degree of decentralization is needed
because decisions must be based on accurate information generated from close
customer proximity. A close market proximity and a relaxed decision
authority structure promotes the opportunity to innovate, change, and improve
products and services on demand. Organizations are under increasing
pressure to maintain a prosperous market presence by exploiting the benefits
that technology can offer to meet escalating customer expectations.
Rising pressures spurred by technology and driven by a competitive dynamic
marketplace are largely responsible for the shift toward a continuous
improvement paradigm. Proponents contend that the continuous improvement
paradigm will allow organizations to compete effectively within an information
centered, knowledge-based society.
For example, in a recent interview, a
chief executive officer for a health care alliance stressed the importance of
the role of information technology in the continuous improvement
organization. The CEO stated “we need to know at the precise moment
when infants in our geographic jurisdiction are dying and why. . . we need to
be able to communicate that information to our practitioners in the field so
changes can be immediately implemented to prevent and troubleshoot future
occurrences. We cannot afford to wait until we receive monthly or even
weekly reports to recognize the beginning of a deadly problem.” According
to the CEO, timely information is required on an ongoing basis. And the
information needs to be communicated throughout the organization irrespective
of any given employee’s work site so procedures can be immediately altered to
meet customer needs. Organizations that thrive in the coming millennium
will excel at developing technology that provides the information and work
processing support needed to meet customer requirements (Martin, 1995;
Davenport, 1993).
The continuous improvement paradigm
challenges general managers to refine and perfect current roles and
responsibilities on how technological innovations are adopted and managed.
According to Cleveland (1985), all organizational activities are
driven by data, information, knowledge, and wisdom (p.21). The sole
purpose of the executive and management function is to mobilize and activate
resources and support structures to make something happen, to produce a good or
service. The difficulty is often in determining which resources to
leverage to produce the desired results. In considering recent resource
expenditures, executives and managers are apparently relying heavily on
technological innovations for meeting their organizational needs.
If expenditures in the information
technology arena are any indicator of expectations, then organizational leaders
anticipate substantial gains from technology adoption. In the 1980s
investment in information technology grew from $55 billion to $190 billion, an
annual growth rate of just under 15 percent (Keen, 1991). By 1992 the
computer industry comprised 10 percent of gross domestic product in the United
States and was larger than auto, steel, mining, petrochemical, and natural gas
industries combined (Tapscott and Caston, 1993).
From a very simple perspective, managers
employ technology for two primary purposes: to improve the productivity and/or
efficiency of work processes, or to advance decision making capabilities.
Yet, despite the investments identified above, many contend that computer
technology has not met managerial expectations for improvements in productivity,
performance, or decision making (Northrop et al, 1990; Anthes, 1996; Brown and
Brudney, 1998). While there is a feast of technology choices, there
appears to be a famine of technology benefits.
As early as 1981, Feldman and March
called into question the benefits achieved from information and
technology. They claimed that “organizations seem to invest in
information and information systems, but their investments often do not seem to
make sense. They gather information and do not use it. They ask for
reports and do not read them. They act first and receive requested
information later, and do not seem to be concerned about the order” (p.
173). Two reasons are cited for the failures: information overload
and ill defined systems. The information provided is either inadequate,
incorrect, or insufficient: there may be a great deal of information (data),
but it is not information that can be used (knowledge).
At the same time that Feldman and March
were questioning the benefits of information technology, Turner (1982) drew
attention to the high failure rate associated with technology adoption.
He stated that "after more than two and a half decades of experience in
implementing computer application systems a surprisingly large number of them
still end in failure" (p. 207). In another early study on the
implementation of information systems, Thayer et al. (1982) found that
over 30 percent of the 60 large computer projects examined were abandoned prior
to completion.
More recent empirical work continues to
support these earlier assertions. Keen (1986) contends that
managers often complain that the reports typical systems produce are too
limited, too late, and too narrow in focus. Reports generally
relate historical financial figures rather than up-to-date operating indicators
that can help managers anticipate potential problems instead of finding out
about their consequences after the event. He goes on to state that
“claims about the almost deterministic relationship between investing in office
technology, personal computers, and information systems and getting improved
productivity have produced too few proven results. It is as if there is
some missing ingredient” (p. 83).
In a more recent analysis of public and
private sector organizations, The Standish Group (1995) validates these earlier
assertions. According to a study of 365 public and private sector
information technology executive managers, one-third of all information
technology projects were canceled before completion. Moreover, only 16
percent of the projects were considered successfully completed on-time and
on-budget. Over 50 percent of the projects exceeded their original cost
estimates by almost 200 percent and roughly one-third of the projects
experienced time overruns of 200 to 300 percent. The Standish Group
estimates that American companies and government agencies spent $81 billion on
canceled information technology projects in 1995 alone. In another study,
Cats-Baril and Thompson (1996) claim that 20 percent of all the projects
studied were scrapped before completion -- and 80 percent of the ones that were
completed finished behind schedule, over budget, and with lower functionality
than originally anticipated (p.563).
While the past two decades have witnessed
the proliferation of computer technology, managers are realizing that
technology benefits are neither guaranteed nor automatic. For many
agencies, ill-defined systems that impede productivity and thwart effective
service delivery are the rule rather than the exception. Organizational
leaders are finding that information technology efforts are too often plagued
by unusually high project failure rates.
Federal GAO reports have documented
numerous examples of operational problems due to information technology shortcomings
and failures: the outlay of millions of dollars of unauthorized student loans
(GAO/AIMD-94-115, p.7), the disbursement of over $1 billion of mistaken
Medicare payments (GAO/AIMD-94-115, p.7), the release of highly sensitive
computer data on federal law enforcement informants (GAO/AIMD-94-115, p.7), and
an $8 billion dollar failed tax system plan (Anthes, 1996). One GAO
report cites that “despite spending more than $200 billion on information
management and systems during the last 12 years, the government has too little
evidence of meaningful returns. The consequences -- poor service, high
costs, low productivity, unnecessary risks, and unexploited opportunities for
improvement -- cannot continue” (AIMD-94-115). But poor performing
systems are not isolated to the federal government. State, local and
private sector organizations are also encountering similar problems.
Information technology systems that are incompatible, overly complex, and do
not provide operational benefits are frequently found in many state level
agencies.
According to Drucker (1995), knowledge is
the primary resource for individuals and the economy overall -- the challenge
for public and private managers is knowing how to best integrate specialized
knowledge and information into common organizational tasks to improve service
delivery. In essence, managers must develop the talent to be able to
assess the operations and needs of the organization and then to identify how
technology can support the work efforts. To employ technology to support
a continuous improvement paradigm, organizations must correct the current
failure rate and demonstrate their ability to successfully adopt information
technology. Organizations that are either unable or unwilling to involve general
managers in their technology initiatives are likely to experience decay.
General managers can help guide decisions
that may impact schedule, cost, system performance, and operational
benefits. They can assist with examining the potential costs and benefits
that alternative approaches may provide in terms of productivity, efficiency,
and service delivery. Managers can also assist with controlling
implementation and monitoring outcomes to promote system success.
Furthermore, they can play a critical role in managing the risks associated
with technology adoption by encouraging staff to adhere to “best practices.”
Increasingly, more and more research is
focusing on the topic of “best practices” -- factors that relate to successful
information technology adoption and implementation. Theoretically, the
study of best practices seeks to isolate the critical success factors that can
aid the organization in minimizing the odds of information technology
failure. Although much has been written on the various factors that
contribute to successful initiatives, unfortunately, the vast majority of the
findings derive from anecdotal stories and small N case studies.
Nonetheless, given the apparent difficulties associated with technology
adoption, much can be learned by examining the literature to date and
encouraging managers to acquaint themselves with the best practice strategies
that have been isolated thus far. By focusing on best practices, general
managers can 1) determine whether the efforts are on or off track, 2) examine
how the efforts will ultimately relate to operational benefits, and 3)
institute acceptable contingency plans to mitigate potential failure. The
role of general managers, then, becomes one of communicating how the
organization defines project success and continuously improving technology
initiatives by adopting, refining, and cultivating best practice strategies
through out the innovation effort.
A cull of the literature points to seven
best practices for achieving successful technology initiatives (Keil, 1995;
Davis et al, 1992; Benjamin and Levinson, 1993; Lederer and Sethi, 1996;
Boynton, Jacobs, and Zmud, 1992; Bowsher, 1994; Standish Group, 1998;
Davenport, Eccles, and Prusak, 1992; and GAO/T-AIMD-97-38). In
short, organizations that have achieved success have done so by focusing on
outcomes and engaging in rigorous project planning and management
practices. Further these organizations institute risk management
techniques and quality assurance procedures. The projects are
characterized by high performing teams and they approach contracting
relationships from a strategic perspective. Finally, their projects enjoy
the benefit of the general manager’s involvement and sponsorship. The
discussion below provides a summary of the best practices identified to date
and an understanding for how managers can influence these practices in support
of their agency’s technology efforts.
The first best practice underscores the
importance of defining technology efforts in accordance with achieving
operational outcomes. In 1992 the General Accounting Office published the
results of a three year study examining information management at the federal
level. After perusing 192 information management reports, the GAO found
that technology projects typically experienced massive cost overruns,
inaccurate data, and poor system performance (GAO/IMTEC-92-13FS). As a
result of this study (as well as several others which identified unacceptably
high technology failure rates), the federal government enacted the
Clinger-Cohen Act of 1996. The Clinger-Cohen act mandates that all
technology investment decisions be based on the careful analysis of relative
costs, benefits, and risks. According to the report, “employing an
investment approach should allow information technology projects a better
chance of being initiated, continued, delayed, or canceled on the basis of
mission or operational performance improvements -- the primary purpose of
deploying information technology in the first place” (p.1). Organizations
that are outcome based focus on the costs and benefits of technology
investments in terms of how the system will ultimately stimulate work
performance, information availability, and customer service. Information
technology initiatives are anchored in mission goals to help insure that
efforts meet operational needs (DeSeve, Pesachowitz, and Johnson, 1997).
Without the outcome focus, an organization may fail to recognize its true needs
according to key stakeholders. Successful efforts require technology
investments to be overtly linked to organizational goals and objectives.
Another best practice, speaks to the
critical role that project planning and management plays in promoting
success. Proponents such as Bowsher (1997), Flowers (1996), and Lucas
(1975) recommend the development of detailed operational plans, clear
milestones, and easily measured deliverables. They caution managers to
limit scope changes and to monitor the progress routinely to help keep projects
on track. McLeod and Smith (1996) stress the importance of breaking each
task into specific, easily measured, deliverables. Accordingly, resources
are attached to each task and achievement toward deliverables are measured and
continuously monitored.
To reduce the rising stem of information
technology setbacks and failures, risk assessment and management techniques are
also gaining the attention of managers and researchers as a best practice
strategy (Higuera, Dorofee, Walker, and Williams, 1994; Gallagher, Alberts, and
Barbour, 1997; Kerzner, 1998). Risk management practices focus on
identifying and resolving problems early, quickly, and cost effectively.
After identifying the likelihood and severity of a potential risk or threat,
contingency planning efforts are developed to circumvent project
derailments. Risk assessment and management strategies are designed to
help prevent the problems that can occur during system implementation.
Risk mitigation strategies can ameliorate problems by encouraging managers to
monitor, identify, and mitigate potential threats throughout each phase of the
adoption process. Specifically, risk assessment and management strategies
help managers identify and select the best technology innovation, control
implementation to ensure success, and monitor outcomes in terms of fulfilling
expectations (GAO/OIMC-96-64).
Another best practice focuses on quality
assurance programs as a means for identifying defects early in the
implementation cycle (Keil, 1995; Bowsher, 1994; Davis et al., 1992).
Quality assurance programs can help to identify deficiencies early in the cycle
when the cost for repair is minimal. Previous research has isolated
that early detection of defects can reduce costs for repair as much as 50
percent (McLeod and Smith, 1996). When deficiencies are identified late
in the development cycle, the repair efforts may demand rework in other
ancillary areas which can increase the cost for repair. Quality assurance
programs designed to continuously monitor development efforts helps to insure
that tasks are completed according to the ultimate business need.
A fifth best practice centers on the use
of multi-tiered, interdisciplinary, high performing teams (Keider, 1984;
Lederer and Sethi, 1996; Regan and O’Conor, 1994). Teams characterized by
a blend of strong technical skills, good business knowledge, and effective
project management provide the support for insuring system success.
System success often depends on teams that are comprised of system engineers,
end users, project managers, executive/general managers, and ultimate
stakeholders. The system development effort has been likened to a
surgical team model. Each member brings their own area of expertise to
the system development effort. System development efforts do not thrive
without the full compliment of talents acting in unison.
Strategic sourcing is the focus of the
sixth best practice (Lacity, Willcocks, and Feeny, 1996; James, 1997; Brown and
Brudney, 1998). Purportedly, organizations adopting a strategic approach
to outsourcing look to external contractors to provide services while also
investing in the internal capacities required to sustain the innovation after
the contract has expired. In a study of 35 geographic information system
implementation efforts, Brown and Brudney (1998) found that the relationship
between outsourcing and benefit attainment is parabolic in nature. The
results suggest that while contracting offers some advantages, over-reliance
compromises the implementation and outcomes of GIS adoption. Contractors
can be used to supplement efforts, they can provide an infusion of talent at
critical points during implementation. However, over-reliance can be
detrimental to success. Organizations must look to building the requisite
internal capacities needed to assimilate the innovation once the system
achieves operation (Lacity et al, 1996).
Among all the best practices, the final
seventh one may be the most crucial for organizations seeking a continuous improvement
paradigm, and is thus, the focus of this research. Active, ongoing
general manager involvement is perhaps the key to mitigating much of the
technology failures experienced to date. General managers can provide the
leadership direction required to insure success. Projects benefit from a
management sponsor who is responsible for providing leadership, mobilizing
resources, and mediating stalemates and impasses. These managers can
provide the direction needed to insure that projects stay on course and stay
directed toward the ultimate operational need (Keen, 1991; Martin, 1995;
Drucker, 1995). The talents general managers provide in terms of
organizing efforts, coordinating tasks, and instilling a firm
understanding for the business need, is paramount to project
success. As identified by Mechling and Fletcher (1996) in a study
of 650 government practitioners, “poor leadership on information technology
issues and initiatives is a significant drag on governmental performance, . . .
general managers need to become more directly and integrally involved in
information technology issues” (p. 47). Undeniably, managers cannot expect
success under situations where technology initiatives are completely delegated
to technical specialists (p. 4).
In short, general managers can assist
with technology adoption by insuring that operational requirements are defined
and well understood, by providing solid planning guidance, by continuously
monitoring progress to guarantee that operational needs are stressed, and by
lending support in the areas of risk management and contingency planning.
General managers can provide the focus and direction needed to keep technology
projects on course and on target.
A cardinal premise of the continuous
improvement organization is to thrive in a volatile competitive market by
providing innovative quality services through human capital and technical
resources. The paradigm stresses a “proximity to customer” approach and
advocates the need for incorporating a decentralized structure and decision
autonomy. The decision autonomy and decentralized structure allows work
teams to innovate, to change procedures and service delivery activities quickly
according to customer preferences. Technology undergirds the service
delivery efforts.
Among the many factors that relate to
information technology success, management commitment consistently ranks as one
of the most important factors to achieving benefits (Keider, 1984;
GAO/T-AIMD-97-38; Boynton et al, 1992). But what exactly is management
commitment? And, what might be expected from the general manager in a
continuous improvement organization for supporting technological
initiatives? In adopting technological solutions under the continuous
improvement paradigm, general managers must understand best practices, they
must help to identify points of failure, and they must assist with contingency
planning. They must be involved in the selection process by assessing the
risks and benefits of varying technological solutions in terms of strategic and
operational needs, and, they must also assist with controlling the
implementation of new technology by defining success, insuring adherence to
best practices, and mitigating risk through contingency planning.
Keen (1991) points to the growing
frustration between information technology managers and general managers.
Historically, there has been a long standing conflict between information
technology departments (with finite resources and limited technologies) and users
(with urgent operational needs and big expectations), between users (with
unique operational needs) and senior management (with enterprise wide
information needs), and between senior management (with a business orientation
towards systems) and information technology departments (with a technology
orientation) (Tapscott and Caston, 1993 p. 293).
Those organizations that thrive in the
next millennium will eliminate the conflict by encouraging general managers to
develop an awareness of how technology can support work operations, to become
motivated and committed to dedicating the time and effort required to adopting
technology, and to have the skills and competencies to understand how
technology can and cannot support their work efforts. If the
paradigm of the future is indeed grounded in a continuous improvement paradigm,
then it is imperative that all managers play an active role in
developing systems that advance and enhance customer service by delivering on
the promise of the next millennium: to provide “everything, everytime,
everywhere.”
· Keider, S.P. (1984). “Why System
Development Projects Fail,” Journal of Information Systems
Management, 1(3). pp. 33-38.