Knowledge that Transforms

Pieptea and Anderson's (1987) article promised to reconcile the conflicting approaches in cost-benefits literature on DSS. However, we find several weaknesses in their conceptual framework and their use of Simon's phases of decision making. We argue that the true relationship between the phases of decision making and the intangibility of DSS benefits is exactly the opposite of what Pieptea and Anderson claim it to be. In the construction of Dimension II, Pieptea and Anderson unjustifiably collapse four criteria into one. Furthermore, some of their criteria appear in the definitions of both the dimensions of their framework. They equate the intangibility of benefits with "value-price gap," which could mislead managers into believing that all DSS with high degree of intangibility are ipso facto justified.

This article presents a new and different perspective on a familiar story. XCON, Digital Equipment Corporation’s (Digital) expert system for configuring PDP and VAX computers, is a well-known commercial expert system. However, much of what has been written about XCON has been from either a technical or development perspective. In a different vein, this research examines how the use of XCON changed the task (configuration) it was designed to support, how it altered the roles and responsibilities of the technical editors (the individuals who performed configuration), and how the system helped eliminate an entire step in the company’s manufacturing process, thereby saving Digital an estimated $15 million. Drawing upon the concepts of organizational information processing, as operationalized by Jay Galbraith, this study shows that use of XCON increased the information processing capacity of the organization. Moreover, the system altered the local execution of the configuration task and provided for a company-wide shift in the process of configuring. XCON allowed a more centralized, controlled, and detailed application of configuration knowledge. This augmented knowledge application and had the benefit of supporting Digital’s product strategy. The main drawback was an increased need to commit resources to ongoing maintenance of the evolving XCON system.

Knowledge-based system (KBS) technology is becoming an increasingly important asset in support of the achievement of corporate goals through strategic information systems. KBS technology transfers represent a particularly significant challenge in light of the shortage of trained knowledge engineers and the long training cycle for new knowledge engineers. Xerox's KBS Circles Program is training large numbers of knowledge engineers in the context of KBS applications that address corporate priorities. This training is accomplished by functional work groups based on a commitment of less than a day per week per year. These work groups are supported by a dedicated KBS Circles Program staff and by representatives from the information management (1M) departments who provide the work groups with system skills, including connectivity to corporate databases and existing systems. 1M representatives also improve their performance as systems professionals because the Circles Program gives them the opportunity to learn about KBS technology, thereby expanding their strategic technology tool kit. To date, more than 75 people have been involved in the program. Despite the small investment of time, the benefits from the KBS applications developed during the first year of the program will exceed $20 million by the end of 1992.

A growing problem for many organizations is spiraling telecommunications costs coupled with the need to respond faster to changing market conditions. To handle such a situation, TRW’s Space and Defense Sector management authorized a new integrated voice and data digital network for 20,000 employees located in 65 buildings. TRW’s top management saw the network as an opportunity to integrate the company’s islands of information, which were isolated within separate data networks. The project took four and one half years from design to implementation at a cost of $45 million. The management techniques employed resulted in critical milestones being met not only on time but also 10 percent under the original budget. The new network provided a single access mechanism that resulted in some unanticipated advantages that went beyond the original goals of fast response and cost containment. The network successfully addressed such problems as developing effective data networking policies, network sizing in a multi-vendor environment, sharing excess information system capacity, centralizing the network while keeping the information systems decentralized, and overcoming the “not controlled here’’ syndrome. TRW’s experiences should prove valuable for large information-intensive companies attempting to meet similar challenges.

Powers-of-ten information biases arise when recurring numeric information is consistently inflated or deflated by a power of ten. Such biases are difficult to detect because the information stream is internally consistent and external verification is impeded. This study confirms earlier findings that information bias detection rates are low. It extends those findings by demonstrating that bias detection does not increase significantly with bias magnitude or specific detection instructions, two often-suggested detection factors: Bias detectors do, however, employ more effective misinformation search and verification strategies than non-detectors. Therefore, IS research should investigate other strategies as well as the possibility that information biases contribute to poor decisions and dissatisfaction with information systems.

This paper examines the major influences and events that led to the creation and implementation of Club Z, a very successful frequent buyer program, by Zellers Inc., a Canadian mass merchandiser and a division of the Hudson’s Bay Company. While the paper describes this major retailer’s innovation in the adaptation of computer technology to store-level marketing, it also analyzes some of the significant aspects of the Club Z implementation from an IS management perspective: how a champion emerged to advocate and protect the project at the highest executive level; how an outside systems consulting firm was brought in to manage the Zellers IS function during the project life; and how the cultural problem of anticipated store resistance to the required new technology was overcome.