INFORMATION TECHNOLOGY IN DEVELOPING COUNTRIES

A Newsletter of IFIP Working Group 9.4
and
Commonwealth Network for Information Technology

Volume 8, No3, January 1998
Editor: Subhash Bhatnagar

January 1998

Information Technology - The New Cargo Cult?

Roger Harris

Universiti Malaysia Sarawak

The publication of Paul Strassman’s research results, that there is no correlation between spending on IT and corporate results, in his latest book, "The Squandered Computer", as well as in earlier books, Datamation and this newsletter in October 1997, threatens to slip by the developing world unnoticed if its implications are not given more attention (Strassman, 1997). Strassman has his critics, certainly, but his argument is highly compelling and should be heeded by the developing world which simply cannot afford to squander computing resources in the way that, according to Strassmann, the USA does. Strassmann claims that the world spent US$ 1 trillion on IT in 1996, more than half of this by the USA, contributing to Roche and Blaines’s MIPS gap ratio of 26:1 with the bulk of the developing world (Roche, 1997). It is essential that the developing world avoids what has become the cult of IT, characterised by the blind belief that technology alone will bring it into the "information age."

In the early 1900s, tribesmen in New Guinea observed that European administrators only had to cable an order or write a letter in order to obtain the goods they needed, which were generally delivered by aeroplane as cargo. If the tribesmen used the right rituals, they believed the cargo would also come to them, so they constructed crude airstrips, warehouses and wireless houses, installed office chairs and tables and began passing around pieces of paper to each other. Such behaviour became known among anthropologists as "cargo cults".

History is in danger of repeating itself on a massive scale with regard to our fascination with Information Technology (IT). The rush by governments and organisations to bring society into an "information age" resembles the blind belief of the New Guinea tribesmen, that mere installation of the technology will magically deliver the expected benefits. There is a lesson that it takes more than mere spending on IT in order to achieve its benefits. There is still no evidence to support the popular myth that spending more on IT will boost economic performance, says Strassmann. The best computer technologies, he says, will always add unnecessary costs to a poorly managed firm.

If mere spending on IT does not improve performance, what does? The answer seems to be that it’s not how much you spend on IT that matters, but what you do with it. Strassmann has introduced a novel measure of management productivity or "value added" which he claims can isolate the effects of spending on IT. In this respect, IT makes a good manager better and a bad manager worse. Organisations with higher levels of management productivity allocate more of their IT to systems which have a direct and favourable effect on the generation of revenues. Organisations with inferior management productivity allocate more of their IT to management information systems. Strassmann concludes that vast amounts of computing resources are squandered on the automation of unnecessary work. Spending more money on the most sophisticated technology will not increase revenues or market share without changing how the organisation runs its business.

Some organisations find it easier than others to change the way they function. Organisations which adapt quickly to new opportunities and new methods of business stand to reap the associated benefits of IT. For many organisations though, inbuilt factors serve to prevent them from changing their operating methods. The more inhibitors to change which are embedded in an organisation, and the more it relies on spending alone to bring it into the "information era", the greater will be the disappointment with the result. This of course assumes anyway that the organisation will care to devise measures of what return it actually gains from its IT investments. In most cases, the very characteristics which prohibit organisations from implementing the structural changes which would allow them to make the most of their investments in IT also serve to inhibit their ability or willingness to take a reality check on the benefits which they have been led to expect from them. It’s a computer salesman’s dream come true.

Organisations such as those in government, which contain institutional barriers to innovation, will suffer the most without realising why. Inflexible bureaucracies, rigid hierarchies, suffocating committee structures and traditional reliance on outdated principles of division of labour tend to dilute innovations down to those minor corrections in current methods which can be accommodated within existing power structures and organisation charts. At the same time, a lack of questioning of ever-demanding IT budgets, based on the belief that IT spending is the only requirement for achieving IT’s benefits, serves to deepen the cult and plays into the hands of those whom it benefits most.

Executives may think that their Information Systems (IS) professionals will save them from this dilemma. After all, they’re highly qualified people aren’t they? Think again. Recent research has revealed the extent to which IS professionals are able to introduce the type of changes which organisations require in order to benefit from IT (Markus and Benjamin, 1996). Apparently, although IS staff believe themselves to be the agents of change, they differ enormously regarding the interpretation of such a role.

There seem to be three types of change agents in the IS field. Many traditional IS professionals view technology as the real cause of change, believing that it alone can make a big difference. They consider themselves experts in technological matters, but believe that the goals of technological change should be set by others. Some IS professionals consider themselves the facilitators of change, believing that it is people (their clients) who create change. They intervene in organisational processes in ways intended to increase the capacity and skills of their clients to create change. They are less concerned with a specific technological implementation than with the client’s ability to assess the merits of alternative solutions. Finally, a few IS professionals advocate specific implementations by recognising what needs to be changed and finding ways to make other people think similarly. They hold that people, not technology, are the causal factors in change management, but they regard people as the targets of change rather than as clients with purposes of their own.

The majority of IS professionals, it seems, hold to the traditional perspective of IT, that technology itself is the cause of change. Such a view is rapidly becoming unviable for IS departments, whose credibility among their user-clients continues to diminish. It stands in the way of positive organisational change by promoting technical interests over business concerns. It would seem that IS specialists have not effectively coped with the human and organisational issues in IT implementation. As Strassmann points out, computer planning by experts from the MIS function cannot hope to come up with actionable strategic programmes to improve business profits.

The failure to fully exploit IT resources is further exacerbated by line managers who exhibit a preference for clinging to the familiar as opposed to venturing along new and uncertain directions. Proposals for innovative changes are always mediated by their context, which consists of social constraints, changeable personal inclinations, authority structures and culturally determined attitudes and value systems. It is a myth to believe that technologies prescribe their own course of action. The responsibility for technological outcomes resides within the social order - in individuals, groups and the institutions through which they organise their lives (McC. Adams, 1996).

Any organisation, or country, wishing to enter the information age must address these issues: that substantial benefits are derived only from changing the methods employed to achieve objectives; that technology without change results in the automation of unnecessary work; that it is people, not technology, that cause change and that technology professionals are rarely the most appropriate people to introduce effective change processes. If these lessons are not heeded by the developing world then the new cargo cult of IT will strengthen its grip on society and cripple its attempts to remain competitive.

References

Markus, ML., and Benjamin, RI, Change Agentry: The Next IS Frontier, MISQ, December, 1996, pp 385-407.

McC. Adams, R. Paths of Fire: An Anthropologists Inquiry into Western Technology, Princeton University Press, 1996.

Roche, E. and Blaine, MJ., Research Note: The MIPS Gap, Information Technology in Developing Countries, Vol. 7, No. 4, October 1997, pp 12-13.

Strassmann, P. The Squandered Computer, Information Economics Press, 1997.