Discussion: Implementing IS Poorly

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Discussion: Implementing IS Poorly

Discussion: Implementing IS Poorly

Risks As demonstrated throughout this chapter, information resources may be used to gain strategic advantage even if that advantage is fleeting. When information systems are chosen as the tool to outpace a firm’s competitors, executives should be aware of the many risks that may surface. Some of these risks include the following:

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• Awakening a sleeping giant: A firm can implement IS to gain competitive advantage only to find that it nudged a larger competitor with deeper pockets into implementing an IS with even better features. FedEx offered its customers the ability to trace the transit and delivery of their packages online. FedEx’s much larger competitor, UPS, rose to the challenge. UPS not only implemented the same services but also added a new set of features eroding some of the advantages FedEx enjoyed, causing FedEx to update its offerings. Both the UPS and FedEx sites passed through multiple Web site iterations as the dueling delivery companies continue to struggle for competitive advantage.

• Demonstrating bad timing: Sometimes customers are not ready to use the technology designed to gain strategic advantage. For example, Grid Systems created the GRiDPAD in 1989. It was a tablet computer designed for businesses to use in the field and was well reviewed at that time. But it didn’t get traction. Three decades later, in 2010, Apple introduced the iPad, and tablet computing took off.

• Implementing IS poorly: Stories abound of information systems that fail because they are poorly imple- mented. Typically, these systems are complex and often global in their reach. An implementation fiasco took place at Hershey Foods when it attempted to implement its supply and inventory system. Hershey devel- opers brought the complex system up too quickly and then failed to test it adequately. Related systems prob- lems crippled shipments during the critical Halloween shopping season, resulting in large declines in sales and net income. More recently, in 2012, more than 100,000 Austin Energy customers received incorrect util- ity bills due to problems with the company’s vendor‐supplied bill collection system. Some customers went months without a bill, and others were incorrectly billed. Some businesses that owed $3,000 were billed $300,000. Still others tried to pay their bill online only to be told that the payment had not recorded when it had been. The utility calculated that the problems cost it more than $8 million.15

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