Evaluation of Information Systems

Definition of Evaluation
Dictionary: assessment of value
the act of considering or examining something in order to judge its value, quality, importance, extent, or condition

Evaluation of Information Systems

The adoption of Information Technology (IT) and Information Systems (IS) represents significant financial investments, with alternative perspectives to the evaluation domain coming from both the public and private sectors. As a result of increasing IT/IS budgets and their growing significance within the development of an organizational infrastructure, the evaluation and performance measurement of new technology remains a perennial issue for management. Evaluating Information Systems explores the concept of evaluation as an evolutionary and dynamic process that takes into account the ability of enterprise technologies to integrate information systems within and between organizations. In particular, when set against a backdrop of organizational learning. It examines the changing portfolio of benefits, costs and risks associated with the adoption and diffusion of technology in today's global marketplace .

Evaluation of Information Systems (contd.)

Within organizations, information systems evaluation is a key part of IS investment decisions, for example in deciding whether to go ahead with a particular project, or to modify or scrap a development. The evaluation becomes a basis for comparison with other projects, both inside and outside the organization. With increasingly large investments, these become decisions with significant financial implications. Moreover, such decisions can have significant implications for both groups and individuals within the organization. Peoples careers or working lives, or a groups command of resources or status, may be contingent on the evaluation of a particular information system.

Evaluation of Information Systems (contd.)

An evaluation is normally a form of measurement or classification, a type of inscription that translates a particular entity or situation, such as an IT investment, into a quantifiable outcome against certain criteria. investment analysis, Financial implications (Cost-Benefit identification) attempts to evaluate whether an IS investment is likely to be worthwhile financially impact analysis, looking at the effect a new system has had - or is likely to have on a particular group or organizational function performance measurement, focusing on how well a particular system is working, typically using fairly low-level technical or financial metrics problem diagnosis, seeking to account for, and solve, a particular IS problem risk assessment, examining the risks of projects failing in some way, and portfolio optimization, where an organization wishes to maximize its portfolio of projects, rather than judging individual projects

Evaluation of Information Systems (contd.)

Evaluation occurs twice in the 'traditional' structured systems analysis and design approach: first, in the feasibility phase, in which an attempt is made to establish likely impact and costs, and, second, in the form of a post-implementation evaluation, which is an attempt to measure what impact the system actually had. This approach focuses on issues such as whether the project was delivered on time, whether it was to budget and whether it met the specifications, and ignores other issues, such as what the stakeholders think of both the 'process' and the 'product. Postimplementation evaluation is also criticized on the grounds that it is generally conducted by system developers as a quick 'pack up and get out' project closure activity.

Evaluation of Information Systems (contd.)

Broader studies, based on theories of information economics, examine the value of IS development on organizations based on factors such as strategic impact, productivity impact and consumer value, while another set of studies, based on behavioral science, addresses the relationship between IS development and individual satisfaction and decision-making behavior, and the consequent impact on the organization.

Evaluating Information System Effectiveness and Efficiency

Section-One Why study effectiveness?
Problems have arisen or criticisms have been voiced in connection with a system;

Some indicators of the ineffectiveness of the hardware and software being used may prompt the review; Management may wish to implement a system initially developed in one division throughout the organization, but may want to first establish its effectiveness;
Post-implementations review to determines whether new system is meeting its objectives.

Indicators of System Ineffectiveness

excessive down time and idle time slow system response time

excessive maintenance costs

inability to interface with new hardware/software unreliable system outputs slow system response time data loss

excessive run costs

frequent need for program maintenance and modification user dissatisfaction with output format, content or timeliness.

Approaches to Measurement of System Effectiveness

Goal-centered view - does system achieve goals set out?
Conflicts as to priorities, timing etc. can lead to objectives met in the short run by sacrificing fundamental system qualities, leading to long run decline of effectiveness of the system

System resource view - desirable qualities of a system are identified and their levels are measured.
If the qualities exist, then information system objectives, by inference, should be met. By measuring the qualities of the system may get a better, longer-term view of a system's effectiveness.

The main problem measuring system qualities is much more difficult than measuring goal achievement.

Types of Evaluations for System Effectiveness

Relative evaluation - auditor compares the state of goal accomplish. after the system implemented, with the state of goal accomplishment before system implemented.
Improved task accomplishment, and Improved quality of working life.

Absolute evaluation - the auditor assesses the size of the goal accomplish. after the system has been implemented.
Operational effectiveness,
Technical effectiveness, and Economic effectiveness.

Task Accomplishment
Providing specific measures of past accomplishment that auditor can use to evaluate IS is difficult.

Performance measures for task accomplishment differ across applications and sometimes across organizations.
For a manufacturing control system might be:
number of units output,
number of defective units reworked, units scrapped amount of down time/idle time.

Important to trace task accomplishment over time. System may appear to have improved for a short time after implementation, but fall into disarray thereafter.

Quality of Working Life

High quality of working life for users of a system is a major objective in the design process. Unfortunately, there is less agreement on the definition and measurement of the concept of quality of working life. Different groups have different vested interests - some productivity, some social Major advantages - relatively objective, verifiable, and difficult to manipulate. Data required is relatively easy to obtain. Major disadvantages - it is difficult to link them to IS quality and difficult to pinpoint what corrective action is needed

Operational Effectiveness Objectives

Auditor examines how well a system meets its goals from the viewpoint of a user who interacts with the system on a regular basis. Four main measures: Frequency of use, Nature of use,

Ease of use, and

User satisfaction.

Frequency and Nature of Use

Frequency - employed widely, but problematic
sometimes a high quality system leads to low frequency of use because the system permits more work to be accomplished in a shorter period of time. sometimes a poor quality system leads to a low frequency of use since users dislike the system

Nature - can use systems in many ways

lowest level: treat as black box providing solutions to the
highest level: use to redefine how tasks, jobs performed and viewed

Ease of Use and User Satisfaction

Ease of use - positive correlation between users' feelings about systems and the degree to which the systems were easy to use. In evaluating ease of use, it is important to identify the primary and secondary users of a system.
Terminal location, flexibility of reporting, ease of error correction

User satisfaction - has become an important measure of operational effectiveness because of the difficulties and problems associated with measures of frequency of use, nature of use, and ease of use.
problem finding, problem solving, input, processing, report form

Technical Effectiveness Objectives Has the appropriate hardware and software technology been used to support a system, or, whether a change in the support hardware or software technology would enable the system to meet its goals better.
Hardware performance can be measured using hardware monitors or more gross measures such as system response time, down time.

Software effectiveness can be measured by examining the history of program maintenance, modification and run time resource consumption. The history of program repair maintenance indicates the quality of logic existing in a program; i.e., extensive error correction implies: inappropriate design, coding or testing; failure to use structured approaches, etc.

Major problem: hardware and software not independent

Economic Effectiveness Objectives Requires the identification of costs and benefits and the proper evaluation of costs and benefits - a difficult task since costs and benefits depend on the nature of the IS.
For example, some of the benefits expected and derived from an IS designed to support a social service environment would differ significantly from a system designed to support manufacturing activities. Some of the most significant costs and benefits may be intangible and difficult to identify, and next to impossible to value.

SECTION TWO - Evaluating system efficiency

Why would an auditor get involved in a study of system efficiency?
evaluate an existing operational system to determine whether its performance can be improved;
evaluate alternate systems that the installation is considering purchasing or leasing. For example, management may be considering two systems with different database management approaches.

To determine whether a system is efficient, the auditor will need to identify:

an appropriate performance index to assess system efficiency.

an appropriate workload model to measure the system's performance in the context of that workload.

Performance Indices
Measure system efficiency; quantitatively how well system achieves an efficiency criterion. Have several functions:
allow users to decide whether a system will meet needs,
permit comparison of alternate systems, and show whether changes to the hardware/software configuration of system have produced the desired effect.

Expressed using ranges or probability distributions - avg. may be deceiving (look at response time variations)

Expressed in terms of workload - e.g., response time of an interactive system will vary depending on the number and the nature of the jobs in the system.

Indices - Timeliness
How quickly a system is able to provide users with the output they require.
For a batch system, typically is turnaround time - the length of time between submission of a job and receipt of the complete output. For interactive systems, the response time - the length of time between submission of an input transaction to the system and receipt of the first character of output.

Must be defined in terms of a unit of work and the priority categorization given to the unit of work.
In a batch system the unit of work usually is a job.

In an interactive system it may be a job consisting of multiple transactions, or a single transaction.

Indices - Throughput & Utilization

Throughput indices measure how much work is done by the system over a period of time.
Throughput rate of a system is the amount of work done per unit of time.
The system capability is the maximum achievable throughput rate. Throughput indices must be defined in terms of some unit of work: a job, a task, or an instruction. The more responsive a system, the greater its throughput.

Utilization indices measure the proportion of time a system resource is busy.

For example, the CPU utilization index is calculated by dividing the amount of time the CPU is busy by the total amount of time the system is running.

Workload
A system's workload is the set of resource demands imposed upon the system resources by the set of jobs during a given time period.
Using the real workload of the system for evaluation may be too costly and too disruptive.

To measure efficiency for a representative workload, the time period for evaluation may be too long.
Also, the real workload cannot be used if the system to be evaluated is not operational.

Need a workload model representative of the real workload

Workload Models
Natural workload models, or benchmarks, are constructed by taking some subset of the real workload.
In a time subset, the content of the workload model is the same as the real workload, but the time interval for performance indices is smaller than the interval for the real workload. In a content subset, sample jobs from the real workload are selected in some way.

Artificial workload models not constructed from jobs in the real workload; useful when system unable to process the natural workload Natural - more representative and less costly to construct

Artificial - more flexible and more compact

SECTION 3- Comparison of 3 Audit Approaches - Objectives

F/S audit - express an opinion as to whether financial statements are in accordance with GAAP

Effectiveness audit - express an opinion on whether a system achieves the goals set for the system. These goals may be quite broad or specific. Audits of system efficiency - whether maximum output is achieved at minimum cost or with minimum input assuming a given level of quality.

Comparison of 3 Approaches - Planning

F/S audit - part is identifying controls upon which the auditor could rely and reduce other audit verification procedures; or, id controls upon which the auditor is forced to rely Effectiveness audit - id goals, measures for determining whether the goals obtained during a specific period, if explicit measures are more straight-forward; however, when broad and multi-dimensional, the auditor may need to develop relevant measures and indicators of achievement.

Comparison of 3 Approaches Planning (Contd.)

Audits of system efficiency - often comparable to a scientific experiment. A scheme for obtaining measurements must be developed explicitly for the performance index defined. For example, if average turnaround time is used as a measure of efficiency, then the experimental task must control for various job sizes, time of day, etc.

Comparison of 3 Approaches - Execution

F/S audit - controls analysis and CAATs Effectiveness - Once the system goals have been identified, measures of goal achievement have been selected, and the population to be studied has been identified, it is necessary to actually obtain measures of goal achievement and analyze the results. Efficiency - During the execution phase the benchmark or workload model test is actually run and the result are subjected to analysis. Care must be taken to control for interference by factors other than those built into the model. And measurements must be taken carefully.

Comparison of 3 Approaches - Reporting

F/S audit - letter re I/C deficiencies Effectiveness - the analysis will likely highlight areas of successful attainment of objectives as well as failures. Explanations of the causes of significant successes and failures should be sought out and included in the report.

Efficiency - reports of studies of system efficiency must typically contain specific recommendations identifying ways in which the identified inefficiencies can be eliminated.