MSc-IT Study Material
January 2011 Edition

Computer Science Department, University of Cape Town
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The benefits of software systems

The benefits of introducing new software are not always easy to identify. The person (or people) who are considering the introduction or extension of a software system (we shall refer to such a person as the customer) may be very enthusiastic about the possible benefits of the new software, such as providing better service and more control. However, given it is unlikely that the existing (manual or partly software-based) system is ruining a business, the advantages of the new software may be very difficult to quantify. In fact, unless the software is well-designed and properly thought out, it may bring no overall benefits at all.

The potential for significant benefits and the differences information systems have made in other organisations are an important motivation for many organisations to investigate the development of new or extended software systems in their businesses.

Organisations, their information systems, and the software they employ, are complex, and therefore the costs and benefits of information system and software development are hard to estimate and measure. Such systems are hard to analyse, design and implement. For this reason there has been much study into the relationship of information systems and software within organisations, as well as into information system and software development.

Broadly speaking, possible benefits can be divided into two categories:

Tactical benefits

Tactical benefits are ones which improve the day-to-day running of an organisation or group in measurable terms.

Customers almost always anticipate or require that new software and systems deliver cost benefits. In some cases software replaces an existing automated system, but the new software has cheaper hardware and lower maintenance overheads. For instance, where a single, centralised computer system is replaced by a network of smaller PCs. Or the software system replaces a manual system and so savings may be made on paper, paper storage space like filing cabinets, and office space. There may be an improvement in communications resulting in fewer telephone calls and faxes. In both cases there may well be a saving on the number of staff required to support the old system.

Another frequently cited benefits of software systems are their speed and accuracy. Information can be retrieved more quickly and with greater confidence in its accuracy. This can improve the productivity of employees. It may also improve the movement of goods and the supply of goods to customers. This could result in an organisation being able to handle more transactions and expand its business.

Strategic benefits

Strategic benefits are about improving the nature or abilities of a group or organisation. With a new software system, a business may be able to offer their customers new services. Or by examining the information held, could new customers or products could be identified. More speculatively, enhanced functionality might allow managers to quickly identify trends in sales or spending. This could lead to a competitive advantage in the market place.

With the introduction of expert systems, knowledge previously confined to a handful of individuals can be distributed and made available throughout a company. This could improve the functioning and performance of a company in many ways.

However, in many ways strategic benefits are even more difficult to quantify than tactical benefits, and without careful planning and design they will simply not appear.