Lection 11 - Trust continued, Implementation for value

Question 1

What are the four phases in the ERP lifecycle? (Markun and Tanis, 2002) (taken from slides)

Answer 1

1. Chartering: decisions defining the business case and solution constraints.
2. Project: getting system and end users up running
3. Shakedown: stabilizing, eliminating “bugs”, getting to normal operations.
4. Onward and upward: maintaining system, supporting users, getting results, upgrading, system extensions. (slides)

Question 2

What are the key differences between the “for profit sector” and the public sector related to normative goal, principal source revenue, measure of performance, key calculations of improvements? (Svejvig, Schlichter, Andersen, 2012)

Answer 2

“For profit sector” = PS, Publib Sector = PB
Normative goal: PS (to maximize shareholders wealth), PB (to achieve social mission)
Principal source revenue: PS (Sales og service and products), PB (Tax appropriations).
Measure of performance: PS (Financial buttom line), PB (Efficiency and effectiveness in achieving the mission)
Key calculations of improvements: PS (Find and exploit distinctive competence of
firm by positioning it in product/service
markets.), PB (Find better way to achieve
mission).

Question 3

What are the four chosen quality dimesions used to measure quality in the article by (Svejvig, Schlichter, Andersen, 2012)?

Answer 3

1. Professional quality (Early dianostics, numbers of people who assessed a physiotherapist, and Proportion of patients who die within 30 days of admission for acute stroke)
2. Organizational quality (lenght of hospital stay)
3. Patient percieved quality (degree of happiness with the hospital stay).
4. Employee percieved quality (The experience of the whole treatment process as well-organised and
   coordinated and I always felt to be in a position where I
   could give the patient good information about the treatment”)

Question 4

Can you explain what this article is overall about: FROM BUSINESS IT VALUE TO PUBLIC IT VALUE
– AN ACTION RESEARCH STUDY OF HEALTHCARE
IN THE FAROE ISLANDS? (Svejvig, Schlichter, Andersen, 2012)

Answer 4

Obtaining business value from IT is a recurring theme that has diffused into healthcare information
systems (HIS) where stakeholders often question the value of IT investments. Having finished the
implementation of an integrated HIS, the Faroese Health Service (FHS) has started discussions about
getting value from their IT investment, and how to reap those benefits is the subject of this paper. In
order to fulfil this objective an action research project was started in the autumn of 2010 consisting of
three cycles: (1) setting the stage for benefit realisation, (2) benefit realisation in a pilot area, and (3)
diffusion of benefit realisation to other areas. This paper reports on the first two action cycles.
Consideration of the first cycle reveals that it is not possible to distinguish between working processes
and HIS, and the benefit realisation in health care (a public organisation) has a much broader
perspective than just financial value. Considering the second action cycle, specific key performance
indicators (KPIs) were identified, and a baseline established for a stroke process (pilot area). The
outcome is that public value in this case can be measured by the KPIs, classified as: (1) professional
quality, (2) organisational quality, (3) patient perceived quality, and finally (4) employee perceived
quality. None of the KPIs is a financial value.

Question 5

What are the critical success factors mentioned by Nah et Delgado, 2006?

Answer 5

1. Business plan and vision
2. Change management
3. Communication
4. ERP team composition, skills and compensaiton.
5. Project management
6. Top management support and championship.
7. System analysis, selection and technical implication.

Question 6

What two groups can business value of a IT in a business context be devided into? (Slide)

Answer 6

Direct benefits: that immediately affect the organization
Indirect benefits (transformational) that provides the organization with a capacity to establish direct benefits in the future. The organizational changes are by nature, both a precondition for benefit realisation from, and a result of the IT implementation projects. (slide)

Question 7

What are the five value categories? (Slide)

Answer 7

1. Strategic value: to change the nature of how a company competes.
2. Informational value: To provide information for decision making in the company.
3. Transactional value: To enable cost savings and support operational management.
4. Transformational value: To change the organizational structure of a company as a result of the implemented IT systems that provide a greater capacity for further future benefit realization. This is typically a longer term effect (lag effect).
5. Unplanned/emergent value: A result of a transformation or change process.

Question 8

How can resistance be defined? (Markus, 1983, Power and Politics)

Answer 8

Resistance is defined as behavior to prevent a certain change. Resistance is a relative behavior - it only exists in contradiction to someone else’s perceived intended behavior. Resistance is not always bad, because it depends on which view you apply and may sometimes even be good in organizational contexts because it can prevent the organization from moving away from its objectives.

Question 9

What are the three theoretical perspectives that can be applied when analyzing a resistance-case, and how can resistanse be avoided according to these perspectives? (Markus, 1983, Power and Politics)

Answer 9

1. The people-determined view: Resistance is a product of a person or group’s unique cognitive styles. The same people will therefore show resistance to any system because of their personalities/group mentalities. Resistance can be avoided by educating users, persuade users, obtain commitment through user participation and place people different places in the organization.
2. The system-determined view: Resistance occurs because of a system design that fails to deliver the needed functionality and usability. A system that meets resistance in one setting will therefore meet resistance in any setting/by any person or group. Resistance is avoided by educating designers, modifying the system to organizational procedures and through user participation.
3. The interaction view, where the interaction view consist of a power and politics dimension that determines if resistance will occur and how to avoid it.
   Within the interaction theory Resistance is a product of the certain interaction between the system, the users, and the setting and is therefore different in each situation. Resistance is avoided by changing/fixing organizational problems before introducing the system, restructure incentives for users, and restructure the relationships between users and designers – this implies that user participation is not always appropriate.

Question 10

What is meant by the power and politics dimensions? (Markus, 1983, Power and Politics)

Answer 10

The power and politics dimension proposes that the group of people who are to gain power due to an implementation are likely to behave positively towards the system, while people who are to loose power will resist to the system. (Markus, 1998)

Question 11

How can resistance be avoided according to the power and politic dimension? (Markus, 1983, Power and Politics)

Answer 11

In order to avoid resistance, according to the power/politic dimension in the interaction theory, one must fix organizational problems before introducing the system, restructure incentives for users, and restructure the relationships between users and designers – this implies that user participation is not always appropriate.

Question 12

What is the purpose of the artikle by Markus 1983: Power, politics, and Management Information System implementation?

Answer 12

The purpose of this paper is to examine which theoretical view can best be used to describe, analyze and prevent resistance towards an implementation of a MIS. MIS = Management information system.
By applying the three theoretical perspectives on a case, the authors conclude that the interaction view is most appropriate when trying to understand or avoid resistance towards a MIS implementation. They suggest a thorough analysis of the organizational and personal context a system is supposed to be implemented in, and use this analysis to prevent power-related resistance.

Question 13

Why - according to the interaction theory - does some people or groups of people resist to use a system when others do not? (Markus, 1983, Power and Politics)

Answer 13

Who resists to the implementation of a system depends on who is perceived to gain or lose power as a result of the system. Power may be relocated due to new data structures or ownership of data, due to the system’s impact on organisational structures/procedures, or due to the right/authorization structures of the system. If the person who is to gain power is located in a higher position, resistance is much less likely than if he/she is in a subordinate position.

Question 14

Why do the authors conclude that the interaction theory is the most appropriate way to understand and avoid situations of resistance in a MIS implementation? (Markus, 1983, Power and Politics)

Answer 14

The interaction theory is most appropriate because it acknowledges that an implementation is affected by both internal and external factors - both users, system, and designers - whereas the two other theories focus only on either the persons or the system as the source of resistance. The interaction theory implies larger organisational implications as the source of resistance, and entails more complex power structures to be important factors when implementing a MIS. This can be seen as a disadvantage of the theory, because it is not universal since every organisational context differs. Nevertheless, by applying this theory one will avoid simplification of a resistance issue, and may avoid resistance fully by analyzing and reacting to the organisational challenges before implementing a system - by doing so, any resistance will be towards the organisational change rather than towards the system itself.

Question 15

How can the decision behind outsourcing be explained from a rational and institutional perspective? (Svejvig, 2011, Institutional Theory)

Answer 15

It is theorized that the decision to outsource stems from both rational and institutional explanations. Rational explanations contain straightforward objective justifications while institutional ones encompass subjective arguments.
These two classes exist because a decision (outsourcing, or other) is usually taken based on elements from both. Rational explanations present clear, readily-available justifications for outsourcing (e.g. cost-saving). Institutional explanations require organizational analysis (qualitative) which yields primarily subjective justifications for outsourcing (e.g. norms). One method of interpreting justifications within the two classes is by applying the Transaction Cost Theory (TCT) (for the rational class) and the Institutional Theory (INT) (for the institutional class).

Question 16

What is the purpose of the paper: Enterprise Systems Outsourcing “Behind the Curtain” A Case Study Showing How Rational and Institutional Explanations Coexist and Complement Each Other by (Svejvig, 2011, Institutional Theory)?

Answer 16

The purpose of this paper is to outline the possible explanations for why a company can decide to outsource its enterprise systems.

Question 17

What is the reason for outsourcing Enterprise Systems? (Svejvig, 2011, Institutional Theory)

Answer 17

Outsourcing ES or other parts of the IS refers to removing tasks, processes etc which were performed internally in the organization, and handing them over to one or more external parties (vendors). There are two classes of explanations for outsourcing: rational and institutional.

Question 18

What is meant by Transaction Cost Theory? (Svejvig, 2011, Institutional Theory)

Answer 18

Transaction Cost Theory argues that the explanations for action are economically based. These are in form of: 1) costs (production and coordination), 2) transaction type (frequent/infrequent; depends on asset specificity), 3) opportunism, 4) uncertainty. Its primary assumption is that outsourcing takes place in order to produce cost-saving. Combinations of the above serve as grounds for decision making, for example: if both the vendor and asset specificity are high, an organization can be inclined to insource instead of outsource.

Question 19

What is meant by Institutional Theory, and what are the three components (or forms of institutional pressure) of the Institutional Theory presented in the case study? (Svejvig, 2011, Institutional Theory)

Answer 19

Institutional theory refers to how behaviour of individuals in an institution is influenced by the organization, its culture and policy. It discusses also the existence of rationalized myths. Rationalized myths are unconfirmable arguments made public, or not, by leaders of the organization, which serve as reasons to motivate certain decisions.
The case study describes three forms of institutional pressure; coercive, normative and cognitive institutional, which lead to isomorphism on the organizational field level. The coercive pressure refers to pressure from other institutions, which the specific organization is dependent upon. The normative pressure is linked to pressure from professionals, like for instance consultants who provide analyses and advice. And last the cognitive institutional pressure, meaning how an organization feels the pressure for change and therefore identifies itself with other organizations. Then tend to mimic similar organization’s actions, because it was a success in the other organization.

Question 20

What are the benefits of multiple perspectives and multiple-theory analysis when analysing why companies chose to outsource (SCANDI example)? (Svejvig, 2011, Institutional Theory)

Answer 20

This paper uses both rational and institutional explanations to analyse SCANDI’s outsourcing strategy. The classic rational explanations are more overt, while the institutional explanations are usually more covert, but still important to explain the research question. A multiple-perspectives analysis is beneficial researchers, however, also the organization’s management can benefit from multiple-perspective analysis before making decisions such as outsourcing. By analysing what institutional reasons the organization has for outsourcing, other than the rather obvious rational ones, managers have a better basis of knowledge and information to make better decisions. A multi-perspective analysis can “open the curtain” and reveal what the real reasons for outsourcing decisions are, because they may involve other factors than what first comes to mind.