Information technology is becoming recognized as an important business weapon. As well as traditional data processing applications designed to increase business efficiency through cost-reduction, information technology is being used to improve effectiveness, for example, through improved information for decision-making and faster speed of response to the customer. More radically, IT can be a key component in doing business in new ways and even transforming a business or sector.
It is clear that while developing IT systems is a necessary condition for success in such cases, it is by no means sufficient. The question, therefore, is how new products, services, processes, and ways of working involving IT can be managed to obtain business benefits. Today the availability and cost of information technology are not the major constraints on its effective application in business. The potential applications of information technology which can be cost-justified and are technically feasible far exceed the capability of organizations to exploit these opportunities.
But while this potential is large, there are many cases of projects which fail to meet their objectives and produce limited business benefits, as well as exceeding budgets by large margins. Cases in which millions or tens of millions of pounds have been spent in IT systems with little or no result exist in many organizations. A recent analysis of top US companies was conducted by Nolan, Norton & Co covering recent major projects which failed to achieve their objectives on time and to budget. In only 9 per cent of projects was technology the major blockage, while in 78 per cent it was people issues. However, typically the focus of planning had been on technology rather than people and organizational issues.
So the capability of information technology is less of a limiting factor than the recognition and implementation of business opportunities for change involving information technology. Given this context, determining the factors behind success (and failure) in innovations making use of