Sunday, 2 February 2025

A Quantitative Model for Evolution or Revolution of Organisational IT - Modeling Decision Makers' Perspective | Chapter 6 | New Advances in Business, Management and Economics Vol. 2

Background: A major and continuing problem in the information technology (IT) profession is the high rate of failure of new information systems (IS) or upgraded versions of them.

Aim: This paper suggests a new normative model that attempts to analyze why the improvement of versions of existing decision support systems does not necessarily increase the effectiveness of the productivity of decision-making processes. Moreover, this research deals with various principles that were examined and identified during Decision-Making processes and integrates them into a comprehensive methodology for building an analytical model which instructs how to design a DSS properly.

Methodology: The paper suggests some constructive ideas, formulated through a mathematical analytic model, on how to select a strategy for the design and switch to a new version of a decision support system, without having to immediately run through a mega conversion and training process while temporarily losing productivity. The analysis employs the information structure model prevailing in Information Economics. The study analytically defines and examines a systematic informativeness ratio between two information structures. The analysis leads to a better understanding of the performances of decision-support information systems during their life cycle.

Findings and Conclusions: The suggested approach explains normatively the phenomenon of “leaks of productivity”, namely, the decrease in productivity of information systems, after they have been upgraded or replaced with new ones. Such an explanation may partially illuminate findings regarding the phenomenon known as the Productivity Paradox. It can be assumed that the usage of the methodology that is presented in this paper to improve or replace information structure with systematically more informative versions of information structures over time may facilitate the achievement of the following major targets: Increase the expected payoffs over time, reduce the risk of failure of new versions of information systems, and reduce the need to cope with complicated and expensive training processes. The theoretical approach presented here may also apply to the introduction of new AI systems that support decision-making.

Limitations: The implementation of a normative approach includes basic assumptions that do not necessarily exactly reflect daily phenomena. However, that kind of approach facilitates illustrating various aspects of the "real world". 

 

Author (s) Details

 

Niv Ahituv
Faculty of Management, Tel Aviv University, Israel.

 

Gil Greenstein
Faculty of Industrial Engineering and Technology Management, Holon Institute of Technology, Holon, Israel.

 

 

Please see the book here:- https://doi.org/10.9734/bpi/nabme/v2/3972

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