Potential Risks of Information Systems

. Potential Risks of Information Systems
Although, organizations derive many benefits from information systems and technologies, sometimes the same systems and technologies can have negative effects on people and organizations. Therefore, organizations should take all possible precautions to make sure that information systems will not hinder their growth and progress. Followings are some problems that can arise from information systems:

a. “Deskilling” of Workers
Introductions of new technologies, especially for purpose of automation, some times render obsolete the existing skills of some workers. Many industries, such as the automobile, defense, and insurance industries, have gone through periods of massive layoffs because of intense automation efforts. So, while computerization can increase operational efficiency and improve profits, sometimes it is also the root cause of work-force reduction.

b. Information Overload
Today, as information systems become more sophisticated and user-friendly, reports can be generated easily and quickly. However, this improvement also has its downside, because excessive amounts of information can overwhelm managers who must digest it and use it to make decisions, a phenomenon called information overload.

c. Employee Mistrust
When organizations introduce information systems, employees sometimes fear that computers will eventually replace them. Unless they are assured that their jobs are not in danger, they well view information systems with skepticism. Further, some companies use computers to monitor the activities of employees, which may also cause mistrust and dislike of computers.

d. Increased Competitive Pressure
A few years ago, when computers were expensive, many companies (small business in particular) that could not afford to invest in these machines found themselves slowly and steadily being pushed out of the marketplace by large companies that invested heavily in computers and information systems. Although price is no longer an issue today, computers can be a boon or a bane for a business, depending on whether it can successfully deploy them or not. Companies that can use computers effectively to solve problems may be very successful; those that cannot find themselves pushed out of the market by competitions that are more technologically sophisticated.

e. Disenchantment with Information Systems
In recent years, the CEO of many corporations has become disenchanted with computers and information systems because of poor returns from investments in these systems. Though there can be many reasons for this, including investments inappropriate technologies or poor applications of good technologies, poor returns can be true value of computers and information systems. Many CEO are now questioning the value of information systems and technologies to their organizations by raising questions such as “How do I measure the return of our investment in IS and IT?” and “What is the true value of IS and IT in achieving organizational goals?”

f. Challenges in Developing Information Systems
Although there are many successful information systems, building these systems is one of the most difficult and challenging tasks facing IS personnel. In spite of the large number and variety of development tools available today, few companies develop systems on time and within budget.

g. Security Breaches
When companies introduce new and sophisticated technologies, they must also find new ways to protect these assets from theft, pilferage, and security breaches. However, the more sophisticated the technology, the more difficult and expensive it is to protect it, so sometimes computers and information systems actually increase the operating costs of an organization.

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