Measuring IS: how does your organization rate?

• Authors: H. A. Smith;J. D. McKeen
• Venue: ACM SIGMIS Database
• Year: 1996

In today's difficult economy, companies are reorganizing and streamlining wherever possible in order to save money and attract customers. This new corporate emphasis on better organizational performance, i.e., both productivity and quality goods and services, challenges all parts of an organization, including IS, to make improvements in what they do and how they operate. This is easier said than done and many organizations are having difficulties knowing where to start, what to do, and what their goals should be. Organizational learning change are the hallmarks of business in the nineties and the starting point for this effort is the collection of accurate and adequate information and its appropriate analysis.It is not surprising therefore that comparison, measurement, and evaluation have become something of a preoccupation in many businesses in recent years. The U.S. National Quality Institute, (which establishes the detailed criteria for the Malcolm Baldridge Awards), suggests there are three components of effective information and analysis which act as the "brain center" driving the corporate improvement effort, regardless of a company's organization or structure (Baldridge Criteria, 1993):1. Scope and management of quality and performance information.2. Collection, analysis, and use of company level data, including customer data and operations data, and linking performance data to overall financial performance.3. Competitive comparisons and benchmarking.These criteria can also be used by individual corporate subunits to determine how well they contribute to overall quality and performance.One organizational subunit receiving a considerable amount of executive attention in this regard is the information systems (IS) function. Many companies are looking to information technology to help them support corporate restructuring, but to do it with increasingly fewer resources. Unfortunately, IS has also been an area of the company that has been extremely difficult to measure and evaluate. IS also continues to have a credibility problem in some organizations where executives believe that IS has contributed little or nothing to the corporate bottom line (Roach, 1989). As well, there are still many users who tend to feel that IS service is lacking or could be bought cheaper elsewhere. With IS budgets coming under closer and closer scrutiny, IS itself is placing new emphasis on measurement to demonstrate its contribution to overall corporate performance, both through quality services and systems and through its ability to do so cost-effectively.This paper looks at the three components of information and its analysis, as outlined above, from the perspective of the IS subunit. It summarizes what IS departments are doing to assess and analyze their organizations and makes suggestions about how the measurement and evaluation of IS both internally and externally could be improved.