Benefits of Using an Information System

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The Benefits of Using Information Systems Information systems are vital to the operation and management of every organization. Managers investing in IS are interested in the benefit their organizations gain from this investment. However, neither managers nor researchers have found a way to justify investment in IS based on its contribution to an organization’s performance. Most studies examining the relationship between IS and performance level have found no positive relationship between the two variables [7]. But these studies have been holistic, relating the total IS investment—software, hardware, personnel—to the total profit of the organization. Our study now suggests that the analysis should be particulate, not holistic. An…show more content…
In this article, we assert the following two hypotheses: • No significant relationship exists between the organization 's characteristics and the overall benefit the organization gains by using the entire IS (all the IS applications portfolio as one entity). • A significant positive relationship exists between organizational characteristics and the benefit the organization may gain by using a specific IS application. These hypotheses are derived from the fact that the overall benefit an organization may gain from IS (when dealing with the entire IS applications portfolio of the organization) is too general, and can be neither predicted nor explained by the organization 's characteristics. Hence, a manager cannot use it to justify investment in IS. Organizational characteristics that have impact on performance such as lead time, throughput time, and lot size [3], do not impact the benefit gained from using the entire IS application portfolio. In order to explain or predict the benefit an organization gains from IS, the definition of the benefit must be more precisely focused. Unlike the total benefit from IS, the benefit an organization may gain from a specific IS application is well focused, and hence, can be predicted or explained by the organization 's characteristics. A manager can consequently use this benefit to justify investment in IS. How the
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