Success and Failure of the Information Systems

. Introduction

Success and failure of the Information Systems (IS) is one of the most prominent topics in the IS field. Explanations on why some IS implementation fulfils its expectations, whereas other fails, are multi-dimensional and complex [Dwivedi et al., 2014].

Successfully implemented IS provides benefits for organizations in terms of improving profitability and organizational performance, as well as efficient business processes or optimizing of working routines on an individual level [Dwivedi et al., 2014]. According to Piccoli (2012), an IT-based IS involves four components: IT, people, structure and process. Grouping into two subsystems - technical and the social subsystems – their interaction is an indispensable prerequisite for a successful IS [Piccoli, 2012].

However, IS and IT can be mismanaged and misapplied such that some IS implementation problems lead to the negative consequences for the company in terms of technological and business failure [Dwivedi et al., 2014]. For Hershey's confectionary manufacturing and distribution operations, this worst-case scenario became a reality. In 1999 business process and systems issue produced operational paralysis. It had weakened company’s quarterly profitability by 16% and led to 8% fall in share price [Gross, 2011]. This cutover had cost America’s most famous confectioner US$112-million and ranked its name in the Top 10 of the most famous Enterprise-Resource-Planning (ERP) disasters.^[1]

In this context, the objective of this paper is to discuss an example from real life, where Hershey’s IS failure is a subject of analysis. This example describes how IT contributed to business failure and what measures should the affected company take, to avoid IS failure and to enable its success in the future.