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1. Analyse the main reasons for increased investment on IT in most business


Large amounts of resources have been and continue to be invested in information technology (IT). Much of this investment is made on the basis of faith that returns will occur. Investment was perceptually categorized by management objective (i.e., strategic, informational and transactional) and tested against four measures of performance (sales growth, return on assets, and two measures of labor productivity). Heavy use of transactional IT investment was found to be significantly and consistently associated with strong firm performance over the six years studied.
Managers acted in the interest of their organizations to start investing in Information

Technology (IT) with an insight that this would provide a solution to all their organizational problems.
Managers were encouraged by the notion that investing in IT correlates with higher

returns and the delivery of expected results by replacing the human component in organizations.


A need to create wealth. With the idea to improve output levels in production. To benefit by producing quality products. To improve service delivery.To control communication activities. With the expectation to achieve customer satisfaction managers expected to benefit from IT by improving efficiency through gaining competitive advantage over their competitors and increasing profits in organizations. They aimed to improve the quality of life of the information worker by enabling them to share information and knowledge. Managers anticipated that IT would improve workers performance, with an element of facilitating document storage and trace business processes for improved production. They also thought IT would enable workers to manage their work effortlessly by saving time. Finally, managers invested in IT with expectations that it would facilitate their decision making processes, which is a trend in many organizations. Most technology fund managers will also have a significant exposure to telecoms companies as well.

The key to the IT sector is global development. The company has a global presence although that is already reflected in its share price. Its technology is not exactly unique, but competition is sufficiently small for it to hold a strong position, supplying to companies like Nokia and Ericsson. Its strength is that it is attacking the corporate market, signing up a client and helping them develop their website and then developing other services from there.

2. Discuss the main issues and problems with an IS implementation.

The process an organization undertakes to improve its management information system involves six core phasesproject preparation, needs analysis, design, selection, implementation and management. The IS Implementation Guidelines are divided into six segments to provide you with instructions and tools to assist you as your organization undertakes an IS initiative. Each segment corresponds to a phase in the life cycle process.


1. Inadequate Project / Program Management Process :- The project was driven by

hard completion dates without having a valid work breakdown structure for a project plan to really understand what it would take.
2. Information system defects :- A defect in an online ordering system may result in e.g.

the customer being charged for a service he does not receive at all, or the customer unwillingly ordering several copies of the same product. A business is responsible for the correct functionality of information systems such as online stores, payment terminals or card swiping devices and the clarity of instructions pertaining to those systems. By handling these types of problems promptly you can ensure that your business maintains a reputation for reliability.

Type of Failure Quality problem s

Reason for Failure


The wrong problem is addressed.

System conflict with business strategy.

Wider influences are neglected. Analysis is carried out incorrectly.

Organization culture may be ignored. Team is poorly skilled or inadequately resourced. Technology pull or push. New legislation.

Project undertaken for wrong reasons. Producti vity problem s Users change their minds.

Implementation is not feasible.

May not be known until the project has been started Inexperienced project manager.

Poor project control.

3. Loss of Key Talent and/or Poor Knowledge Transfer :- Outsourcing creates

uncertainty for existing employees and contractors who provide services to the client organization. The uncertainty can cause this staff to look elsewhere for employment and leave either before or during the outsourcing implementation. 4. IS development efforts have resulted in a large number of outright failures. These failures are sometimes due to economical mismatches, such as budget and schedule overruns, but surprisingly often due to poor product quality and insufficient user satisfaction.