A model for assessing the perceived value of knowledge based systems
- Publication Type:
- Thesis
- Issue Date:
- 1999
Open Access
Copyright Clearance Process
- Recently Added
- In Progress
- Open Access
This item is open access.
Knowledge Based Systems (KBSs) have the potential to automate a significant number of
the decision making processes across organisations of all types. This represents a unique
capability, not available to conventional information systems. It gives KBSs the potential to
increase internal efficiency, and to enhance an organisation's competitive position. Despite
these potential improvements, the impact of this capability upon an organisation introduces
a host of new and complex management issues.
Strategic planning for the use of KBSs in organisations is recognised as an important, but
neglected area of KBS management research. In practice, KBS development methodologies
are used to guide KBS strategic planning. Historically, KBS strategic planning efforts have
been poor and are linked to the very high incidence of KBS failure in organisations. While
KBS development methodologies may be able to identify potential KBS projects, they are
unable to identify which projects have the highest organisational value. The core of the
strategic planning problem is that KBS development methodologies adopt current valuation
models which do not adequately assess whether investment in a KBS is worthwhile. These
valuation models are designed for use in the domain of conventional information systems,
but are problematic when applied to KBSs. The unique capability of KBSs to make
decisions generates numerous tangible and intangible costs and benefits which cannot be
captured by these current valuation models. In addition, these current valuation models fail
in three key areas that are critical for adequately assessing KBSs value. First, they do not
provide disaggregated information on costs and benefits, many of which are peculiar to
KBSs. Second they do not classify these costs and benefits into categories that are
meaningful to managers making KBS investment decisions. Third, despite the fact that
current valuation models cannot measure intangible costs and benefits, they do not utilise
the perceptions of KBS employees to measure them. Using employee perceptions to
measure intangible costs and benefits is valid if a recognised psychological model is used to
measure perceptions of value.
A valuation model specifically designed for KBSs, which addresses these key areas, is
needed by managers planning for an organisation's KBS strategy to enable them to identify
KBS investments with the highest organisational value. The aim of this thesis is to propose
and verify such a model. To achieve this, the case study research methodology was used.
The chosen case is a large sales and manufacturing organisation. At the time of study this
organisation was developing three KBSs and was interested in being able to measure the
relative value of the systems.
The study found that the proposed KBS valuation model presented in this thesis
overcame the inadequacies of current valuation techniques. First, the results indicate that
value of a KBS to an organisation can be assessed by measuring KBS value perceptions
of three key employee groups involved in the KBS lifecycle. These groups were found to
be: KBS project managers; knowledge domain experts; and KBS users. Employee
perceptions of KBS value were measured by adapting the Theory of Reasoned Action
(TRA) which reliably produced valid measures of perceived KBS value. Second, the
results indicate that the KBS value perceptions were able to be expressed as disaggregated
tangible and intangible costs and benefits. Third, these disaggregated costs and benefits
were able to be classified into three categories of value found to be common to all KBSs
and meaningful to management. These categories are: time; finances; and quality. Finally,
a new graphical technique, termed a "KBS value graph", designed to visually portray to
managerial decision makers, the perceived value of a KBS was developed. It lucidly
portrays perceived KBS value while supporting the three critical areas of KBS valuation.
Please use this identifier to cite or link to this item: