The determinants of the critical success factors of information systems downsizing
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The determinants of the critical success factors of information systems downsizing GJ Udo1 and RC Kick2 1
Center of Excellence Information Systems, College of Business, Tennessee State University, Nashville, TN 37203; 2Department of Decision Sciences & Management, College of Business Administration, Tennessee Technological University, Cookeville, TN 38505, USA Competitive advantage in the information age is based, in large part, on a firm’s capability to acquire and use quality information as well as effective and efficient services, with its information technology resources at the least possible cost. One possible strategy for improving the cost-performance ratio of information technology resources is known as downsizing. The downsizing effort is a strategic move that is believed by many organizations to be capable of yielding significant benefits. It can also be a costly endeavour which may leave a firm worse off. Therefore, careful planning and control must be exercised if information systems downsizing is to succeed. This paper reports the results of a study whose purpose is to identify and explain the critical success factors for a downsizing effort. Results of the study show that information systems downsizing may produce benefits such as improved information systems, improved organizational structure, higher productivity, and lower cost. The results also indicate that downsizing success is dependent upon complex linkages of communications, action plans, needs for downsizing as perceived by employees, and the specific method of downsizing used.
Introduction The information age is proving to be a double-edged sword for businesses. On the one side the variety and power of information technology (IT) resources (hardware, software, data communications, personnel) have been an enabling factor for sustained growth and profitability for some. On the other side there has been an increasing dependency on IT not only for growth, but for survival. In short, cost-effective deployment and usage of IT resources has become a strategic success factor for business firms (Saarinen & Vepsalainen, 1994). Firms, at a time of growing global competition and scarce economic resources, are striving to create efficient organizational structures and cost-effective (highly productive) information system (IS) functions (Earl, 1996). An IS function is defined as the total resources (measured by total costs) a firm commits to providing information for decision-making and IT-based services. Traditionally, firms have utilised centralised IS departments to provide the bulk of IT-based support. In the last decade there has been a movement to end-user computing where the centralised IS department has shared responsibility with end-users for providing information and services. Contracting with a third party for the production of specific IT support is a third method that firms may use for IS services. As technology increasingly impacts the ability to compete in wor
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