Organisations may arrive at the need for an information system through a number of alternative avenues. It may be a response to an known problem, the realisation of an established ISM strategy, a result of a business process redesign (Davenport,1993), or even imitation of a competitor’s tactics. A meticulous system is initiated with specific business goals in mind, and with a set of primary objectives being sought by the introduction of the system. These objectives constitute the expected benefits that have to be comparatively evaluated against costs, in order to justify it.The costs associated with developing a particular information system are relatively easier to measure in respect to the direct one. Indirect costs arising from implementation set-backs or from organisational resistance to change are virtually impossible to assess a priority.However, in comparative terms, it is significantly more difficult to obtain hard evidence of the expected benefits than it is of the costs. Brown (1994, p. 187) distinguishes between hard and soft benefits. Hard benefits are a direct result of the introduction of the information system and are easily measured. According to Brown (1994), soft benefits include at least intangible, indirect and strategic.Hard benefits are usually related to cost reduction, such as the reduction in data-entry staff made possible by the introduction of an electronic ordering system or to revenue generation, such as the increased through-put as a result of a new production control system.Such measurable benefits are relatively easy to incorporate in traditional investment appraisal techniques. The problem of measurement discussed above is mainly related to the remaining three categories of so-called “soft” ISM benefits .Intangible benefits can be attributed to particular applications but they cannot be easily expressed in quantitative terms. Benefits of this type arise, for example, with the introduction of a decision support system. Such systems are primarily expected to improve the quality of decision making as well as the job structure of their users.
It is difficult to define “quality of decision making” and “jobstructure”. Second, even if this is achieved, it may still be difficult to assign a quantitative measure of improvement in advance (eg monetary).Indirect benefits are potentially easy to measure but cannot be wholly attributable to the proposed investment and can only be realised as a result of further investments,enabled by the new system.Strategic benefits refer to positive impacts that are realised in the long run and usually come as a result of the synergistic interaction among a number of contributing factors. They are the outcome of, for example, a new business strategy or a better market positioning of the organisation, which can only be partially attributed to a given ISM. Such benefits are difficult to quantify in advance due to their very nature and to the risk associated with their realisation.
Summary:- It must be noted that rarely does one information system yield one type of benefits alone. Any given information system can be expected to deliver a range of various types of benefits. Moreover, different kinds of systems can produce different combinations of types of benefits,thus a regular individua apply this approach to understand the basis of ISM.