Essay: Strategic Uses of Information

Essay: Strategic Uses of Information
13/04/2011 Comments Off on Essay: Strategic Uses of Information Academic Papers on Business Studies,Sample Academic Papers admin

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Brief Synopsis

This case describes the forecasting, for the implementation of Information System as CASE Tools in an organization called Company X, a US-based subsidiary of European Multinational Corporation, which has been developing and marketing high-technology embedded microprocessors, with a majority of its software developers assigned to maintaining existing products. The company has seen a shift of much of its resources into the maintenance of existing products, an activity which produces almost no incremental revenue. But it now plans for the introduction of new products over the next 5 years.  This requires a change from current practices to the introduction of new software technologies. This case describes how the decision making regarding the implementation of the new Information System was supported by Cost-Benefit Forecasting Model by providing a comparison between alternative scenarios.

What are the stages of the IS “product” life cycle?

–      In the case of Company X, the lifecycle begins with its introduction of the new software development products in the Company X which would result in the increase in expenditure in form of additional software, hardware, and training.

–      The next stage would involve, continuing training of the programmers responsible for the development of products, which would increase their efficiency and improve the quality of the final products.

–      In the third stage, as the products are launched into the market, the increased quality of the products would also result in an increase in the efficiency of the programmers responsible for the maintenance of the products (Khosrowpour, 1997, p.61).

What must “hard” (technology or otherwise clearly quantifiable) elements be taken into consideration when estimating the costs and benefits of implementing an IS?

–          Hard elements taken into consideration, in this case, are total headcount, the ration of development programmers to those required for maintenance and average cost per head. At the planning stage, an analysis revealed that the most costly factor in the development expenditure was the head count. The ratio of development programmers to those required for maintenance was also important as it was important for the company to direct more resources to development. The increased efficiency of programmers, improved quality of products resulted in increasing overall productivity which reduced the average cost per head in the long run (Khosrowpour, 1997, p.60).

What must “soft” (qualitative or otherwise intangible) elements be taken into consideration when estimating the costs and benefits of implementing an IS?

–          In this case, the efficiency of the software programmer is taken into account in the cost-benefit model used for Company X.  This increase in efficiency of the programmers results in increasing productivity and thus reduces the labor cost, which was translated into increase savings for Company X(Khosrowpour, 1997, p.62).

What are the three most important things to consider, when making a business case for a new IS and why are these three the most important things to consider?

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