Systems Development Risks in Strategic Information Systems
Systems Development Risks in Strategic Information Systems
Chris F Kemerer
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The new system, the Enterprise Agency Management System, is needed because the old system grew haphazardly and is therefore difficult to maintain. Citicorp has implemented a separate division, the Information Bank, to continuously develop and market new technology based products [CultSV]. The Information Bank is viewed as a long term venture, and in 1986 it lost $34 million, according to Forbes . C. 4. High exit barriers The very large expenses associated with strategic systems (see section rV.... A. 2) can create high exit barriers. Firms may invest such a great amount of money that exiting from the industry may be devastating. For example, Federal Express' Zapmail failure has forced the company to market international X. 25 networking services at "exceptionally low rates" [Stei88b]. The service will be provided through the Federal Express International Transmission Corporation subsidiary using the data lines that were intended to support international Zapmail transmission. 17 D. Results Summary From the many examples presented in this section it is clear that developing successful SISs requires careful planning to avoid the problems faced by other firms.
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