The Global RISK Example for Free

On a global scale, several important firms are determined to attain “Agile management” as this enhances a company's capability to swiftly manage” internal and external” transformation and gain competitive advantage (Khosrow-Pour, 2001, p 831). An “agile” company is adept in its ability to “detect changing markets, rapidly learn to take advantage of these market changes, detect new techniques, adapt these techniques to organisational culture” in order to incorporate them into the company “while maintaining their spirit”, efficiently exploiting them to meet changing “standards in diverse markets” and adapting “products to individual preferences” (Desouza, 2006, p123). To be able to react rapidly to transformation by making “quick decisions” on methods to counter the transformation and consequently execute the methods, it is crucial for organisations to effectively utilise Information Technology (Khosrow-Pour, 2001, p 831). A Management information System (MIS) is useful by way of its procedure and as such it must be effortlessly up to standard for a firm (Khosrow-Pour, 2001, p 831). The usefulness of MIS is measured by how much the system is utilised, whether end-users are content with the system, “favourable attitudes about MIS functions, achievement of objectives” and whether it increases business profitability (Khosrow-Pour, 2001, p 831).

MIS Risk

As an MIS system is made up of “hardware and software”, consequently transformations in the system make it susceptible to a “penalty of change” such as “system failure” or other costly time consuming risks (Khosrow-Pour, 2001, p 831). As such technology must be effectively applied to the MIS “infrastructure (hardware, software and data)” in order to eliminate or minimise system risk (Khosrow-Pour, 2001, p 831).

MIS issue

A “field research” at a UK bank to analyse a “multidisciplinary” move towards “empirical investigation” on handling Information Technology concluded that the dialogue between those “who request development of a management information system (MIS), the client or sponsor and the technologists” who build the systems usually creates a “confused picture” (Currie, 1995, p7). The clients are usually not clear about their systems requirements and consequently this leaves room for interpretation on the part of the “technologists” (Currie, 1995, p7). In addition, an “ad hoc approach” originates from problems experienced by “project managers” in detecting suitable “financial and non-financial performance” measures for continuous observing and managing of Information Technology projects (Currie, 1995, p7).

How to address the MIS issue

The issue is a result of miscommunication between the business and Information Technology. Management has to ensure that the dialogue between the two teams is effective and also that organisation goals such as high productivity and cost reduction are included in the planning of an MIS systems implementation or change.

Design/UCD Failures

Strategic Information Systems can sustain and “shape” business strategy to impact “organisational performance” in a relationship that forms a “trilogy” (Croteau et al, 2001, p78) however; the design and development” of Information Systems plays a major factor in the use of Information Technology (Das et al 1991, cited in Croteau et al 2001, page 80). User centred design places the end user's requirements and ability at the “forefront”, conversely current technology focuses on the quest for technology answers with no consideration for the end user's requirements in terms of “functionality” and ease of use (Kent et al, 2003, p87).

UCD Failures

An eminent online book retailer's first online ordering system had a major costly flaw (Hambling et al, 2008, p10). System developers had included an electronic refund facility that allowed users to receive credit on their debit or credit cards if they purchased a negative number of books (Hambling et al, 2008, p10). During testing the systems developers did not anticipate that online shoppers would try to order a negative number (Hambling et al, 2008, p10). The program was amended to allow only the retailer's administrative staff to carry out refunds (Hambling et al, 2008, p10). Another UCD failure resulting from inadequate software design and testing was when the “European Space Agency Ariane 5” was initially launched in June 1996 and failed after 37.5 seconds (Hambling et al, 2008, p10). A software glitch resulted in the rocket deviating from its “vertical ascent” and had to be put into “self-destruct” mode to prevent the disastrous consequences of an active horizontal rocket (Hambling et al, 2008, p10). Furthermore, when the UK government launched “online filing tax returns”, a weak security design allowed access to other users' confidential earnings data regardless of log in location (Hambling et al, 2008, p10).

How to prevent UCD failures

A manager must ensure that the end users of the system are the main focus of any system design with particular reference to a user's computer skills, security and the main objective of building the system, to improve business process. Consequently if the design is user focused; it is bound to function as intended. In addition, User Acceptance Testing (UAT) is the process whereby end users test a system to ensure that it “meets their business needs” (Hambling et al, 2008, p45). Although this process is seen as the responsibility of the end users of a system, it should be managed by managers to prevent errors (Hambling et al, 2008, p45).

Project Failures

A failed project is one that exceeds its set budget, over runs, does not incorporate organisational goals or just one that is cancelled (Standish Group International 1994, cited in Linberg 1999, page178). The proportion of IT systems failure is still high when compared to other technologically advanced projects (Yeo, 2002) and although there have been some “success stories” in systems “development” projects these have been overshadowed by “broadly publicised failures” (Linberg, 1999, p177). When Information Systems projects fail, the trustworthiness of technical staff is negatively impacted (Remenyi, 1999, p5) and it is believed that the lack of risk management has greatly contributed to these project failures (Remenyi, 1999, p9). With particular reference to Information Systems projects, failure can range from little technical hardware problems to total “system failure” that harms a firm's business activity by creating huge costs (Remenyi, 1999, p19). Consequently, ineffective risk management is synonymous with leaving the results of a project to chance and “unfounded optimism” (Fairley 1990, cited in Remenyi 1999, page9).

Project Failure Issues

When there are unrealistic expectations and people “try to do the impossible”, projects are likely to fail (Linberg, 1999, p177). A good example is a company bending over backwards in an attempt not to lose a significant client (Linberg, 1999). An unrealistic software development project deadline was set and when programmers protested profusely that is was just impossible, more programmers were added on to the project that was already operating around the clock (Linberg, 1999). Needless to say the project failed and the client was not retained (Linberg, 1999). Another example of a failed project was a large one that over run by at least eighteen months, had eight absconding “team leaders” out of a total nine, lacked clarity in the project definition and involved excessive working hours of more than sixty a week. However because the project was eventually finished, the project programmers did not have see the project as a failure even though it was due to the very late completion and inadequate project planning (Linberg, 1999).

How to address the project failure issues

The approach to the first project should have been honest and realistic in order to meet the client's needs and also increase the likelihood of repeat business with the client. This is due to the fact that “a consulting engagement is successful if the consultant has met client expectations” (McLachlin, 2000) and if this is the situation then” the consultant has enhanced his or her reputation, with expectations of future revenue streams – whether or not any immediate income has been received” (McLachlin, 2000). Consequently business managers should first ensure that they can deliver before taking on the task. With reference to the second project failure, a carefully structured project plan with a clear project definition needs to be in place before management embarks on a project. A well structure project plan with carefully allocated resources, effective risk management and well monitored project stages will introduce and enforce project and budget controls.

E-Commerce and its Issues

E-commerce is a compressed name for a broad range of unified business ideas, “technologies and cultural phenomena” (May, p2). E-commerce is about online retail commerce for certain individuals and for others, it concerns the sale of advertising space amongst other things (May, p2). Nevertheless, irrespective of its definition, E-commerce has warranted a lot of interest and in fact it is a vital transformation in “the way business is conducted” (May, p2). E-commerce has resulted in creating new prospects for several businesses in various industries to contend in the “global marketplace” (Chaffey, 2006, p4). As a result of readily available information on businesses, goods and services, companies are rapidly expanding the customer base and retaining customers due to the resulting improved client-customer relationships (Chaffey, 2006, p5). However, E-commerce software programs need more technical support than a good number of conventional “business systems” (May, 2000, p222). Business to business and “business-consumer” online programs demand twenty four operations around the clock, seven days a week right through the year (May, 2000, p222). Even though mirror sites are run to ensure “scalability”, web systems failure still occurs with several pages experiencing downtime (May, 2000, p222).

E-commerce Issue

A website experienced an overload and needed to be taken offline in November 2005 due it being incapable of handling a lot of simultaneous logins resulting from publicity on some information on the website (Hambling et al, 2008, p10). Although this is a frequent occurrence in today's online activity, the main issue in E-commerce is security risk and as the confidence of shoppers determines the frequency and amount of purchases made online, this is indeed a very significant point. An online consumer's perception of security is affected by absence or presence of “third party certification” software on their websites (Pingjun et al, 2008). A review of a representation of the link between “third-party identifying logos, trust transfer and trust build-up” based on information acquired from an “online survey” confirms that when online consumers see a “third-party seal” on a shopping website, they tend to transfer their trust in the security “logo” to “online e-marketers” (Pingjun et al, 2008). These issues should be handled by anticipate overload from a technical perspective and also by ensure the consumer confidence is gained and retained in E-commerce.

New Technology

Today's world is an age of unique transformations within technology in the midst of technology transforming communication, work, how business is conducted and how people socialise (Boreham, 2006, p1). When new technology is implemented, it is expected that management will impact how it is adapted by the workforce, despite this, an empirical study states otherwise (Leonard-Barton et al, 1988). When new technology is implemented, staff with existing technical abilities adapt automatically whereas staff low on computer literacy skills wait to be directed by management (Leonard-Barton et al, 1988). However, as an increasing amount of time and “investment capital” is absorbed by Information Technology and its consequences, business managers have a developing “awareness” that technology cannot be the “exclusive territory” of specialised IT companies or the Information Systems department (Porter 2008, p73). Businesses notice their competitors employ Information Technology to gain competitive advantage and acknowledge the necessity to become “directly involved in the management of new technology” although “in the face of rapid change, they don't know how” (Porter 2008, p73).

New Technology Issues

New Technology is usually opposed as it usually involves change and people assess the size of the change required. New technology also usually results in a “large-scale organisational change” and consequently extra caution is applied as individual feelings must be influenced to get people to participate in new technology (Kotter et al, 2002, p1). In theory the opposition to new technology also known as the “crisis of progress” is as unconnected as it is connected in that community response to new technology impacts new technology “in a circular process” (Bauer, 1997, p2). Management should address resistance to new technology by first ensuring a “readiness for change” through training and guidance.

References

Bauer M, 1997.Resistance to New Technology: Nuclear Power, Information Technology and Biotechnology; Cambridge University Press Boreham P., Parker R., Thompson P., Hall R., 2006. New Technology Work; Routledge Currie W. 1995.'The IT strategy audit: formulation and performance measurement at a UK Bank'. Managerial Auditing Journal.10 (1). pp 7-16.DOI:10.1108/02686909510077343. www.emeraldinsight.com. (Accessed: 15th February 2010) Chaffey D., 2006. E-Business and E-Commerce Management; Prentice Hall Desouza K. C., 2006.Agile Information Systems: Conceptualization, Construction, and Management; A Butterworth Heinemann Title Hambling B., Morgan P., Samaroo A., 2008. Software Testing: An ISEB Foundation; British Computer Society Kent S. T., Millet L. I., 2003. Who Goes There?: Authentication Through the Lens of Privacy; National Academics Press Khosrow-Pour M., 2001.Managing Information Technology in a Global Economy: 2001 IRMA Proceedings; IGI Publishing Kotter J P and Cohen D S(2002), The Heart of Change; Real-Life Stories of How People Change Their Organizations, Harvard Business School Press Leonard-Barton D., Deschamps I., 1988.'Managerial Influence on the Implementation of New Technology'. Management Science. 34(10). Pp 1252-1265.www.jstor.org. (Accessed: 16th February 2010) Linberg K. R., 1999, ‘Software developer perceptions about software project failure: a case study. The Journal of Systems and Software.49 (1). pp 177-192.www.elsevier.com. (Accessed: 16th February 2010) May P., 2000. The Business of Ecommerce: From Corporate Strategy to Technology; Cambridge University Press McLachlin R. D., 2000,'Service quality in consulting: what is engagement success, Managing Service quality, 10(4).pp. 239-247. www.emeraldinsight.com. (Accessed: 16th February 2010) Pingjun J., Jones D. B., Javie S., 2008.' How third-party certification programs relate to consumer trust in online transactions: An exploratory study' .Psychology and Marketing. 25(9). Pp 839 -858. www3.interscience.wiley.com. (Accessed: 16th February 2010) Porter M. E, 2008, On Competition; Harvard Business School Press 2nd Edition Yeo K. T., 2002.'Critical Failure Factors in Information systems projects'. International Journal of Project Management.20(3). www.elsevier.com. (Accessed: 16th February 2010)

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