The impact of the, “human factor”, in evaluating investment in Information Systems

4 Nov

Kim, H.W. and A. Kankanhalli, (2009), state that, “user resistance to information systems implementation has been identified as a salient reason for the failure of new systems and hence needs to be understood and managed.” Resistance to change, or the “human factor”, (Ahmed et al, 2006) is an interesting phenomenon to look at in terms of evaluation of IS investments. In order for an investment to be successful, it must be implemented properly, and embraced by its users. However often systems users fail to accept the introduction of the new system, and try resist the change. Simply defined, this theory accounts for “operators/users of the technology refusal to wholly adopt the technology to fully utilize the potentials of the technology.”(Ahmed et al, 2006) Given the large sums of money being pumped into information systems, organizations should take steps to ensure the smooth application of new programs. Evaluation of current practices is necessary, and organizations must create programs that allow for the adaptation of the new system. Kim and Kankanhalli, (2009) have identified the reason for this problem and have provided solutions that organizations wishing to invest in new systems should take into consideration before implementation.

In their research Kim and Kankanhalli, discovered that switching costs, (“Switching costs refer to the perceived disutility a user would incur in switching from the status quo to the new IS and consist of three components i.e., transition costs, uncertainty costs, and sunk costs.”) play a significant role in increasing user resistance. In their review of status quo bias theory the authors were able to test eleven hypotheses based on user resistance, and the factors which encourage and reduce this phenomenon. The results are as follows

  • High switching costs are a key determinant of user resistance
  •  Colleague opinion and self-efficacy for change as antecedents that reduce switching costs
  • Perceived value of the new systems and organizational support reduce user resistance.

If an IS investment is to take place, it is in the best interest of the company to ensure minimal switching costs, which are said to impact greatly on employees ability to adapt, and reduce the resistance to change. These human factors, effect the implementation of certain IS projects. The solution to the, “human factor”? Authors would suggest that higher level management should strive to deliver, “change management initiatives.” (Ahmed et al, 2006)

It is crucial for management to provide programs to employees focusing on the features of the new systems, while also showcasing the potential benefits the organisation will accrue as a result of the successful implementation. Furthermore ensuring organizational support should greatly reduce resistance to change.

Do people think that resistance to change is a crucial factor which impacts on evaluating investments in information systems? Is highlighting the potential value of the system and ensuring organizational support enough to reduce user resistance? Is user resistance inevitable in all organizations undergoing change?

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2 Responses to “The impact of the, “human factor”, in evaluating investment in Information Systems”

  1. 1rguru November 5, 2012 at 12:36 pm #

    I believe that the introduction or alteration of an information system has a powerful behavioral and organisational impact. i.e. changes in the way information is accessed and used can lead to new distributions of power and authority. This in turn can lead to resistance which could lead to the demise of an otherwise good system.

    This fits under the heading of project risk and it is up to the project leader to ensure that their is no resistance or that it is at a minimum. Laudon 2006 describes it as the ‘change agent’ and it is the change agents (system analyst) job to ‘communicate with users, mediate between competing interest groups and to ensure that the organisational adjustment to change is complete.’

  2. ronnoc90 November 5, 2012 at 1:50 pm #

    Hi 1rguru thanks for taking the time to read and comment on my post.

    I agree information systems can have a powerful impact on the power balance in an organisation, which turn can result in user resistance upon the introduction of a new system.

    The work of Kim and Kankanhalli, 2009 highlight this issue and offer resolutions based on the extensive testing of their hypotheses. Your reference to Laudon, 2006, is interesting in that it reflects similar sentiments to Kim and Kankanhalli who have confirmed that organisational support (meditiation) acts as a means to reduce user resistance. The authors suggest that colleague opinion also impacts in an employee’s resistance. Therefore there is a strong impetus for project managers to ensure minimal switching costs and guarantee organizational support.

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