Identifying the Business Value of Information Security

Management may see information security as an inhibitor to daily operations if the investment is not well aligned with current business activities or is presented in financial terms not relevant to their agenda. While this chapter shows that information security improvements create bottom-line business benefits, there is still a need for security managers to focus on quantifying those benefits in relevant financial terms. The purpose is to demystify the principles of general investment processes and criteria for calculating the benefits and costs of investments while accentuating alignment to the imperatives of the organization that makes the investment. As information security investments are assessed alongside other investment projects, it helps to consider them on an equal footing, implying the use of similar, and ideally the same, methods of financial cost projection. It is equally important to position and present the proposed investment in a relevant business context.

Cost-Effectiveness of Security Measures

Recently, cyber security has become an important topic on the agenda of many organisations. It is already widely acknowledged that attacks do happen, and decision makers face the problem of how to respond. As it is almost impossible to secure a complex system completely, it is important to have an adequate estimate of the effectiveness of security measures when making investment decisions. Risk concepts are known in principle, but estimating the effectiveness of countermeasure proves to be difficult and cannot be achieved by qualitative approaches only. In this chapter, the authors consider the question of how to guarantee cost-effectiveness of security measures. They investigate the possibility of using existing frameworks and tools, the challenges in a security context as opposed to a safety context, and directions for future research.

Information Quality on Yahoo! Answers

Along with the proliferation of the Social Web, Question and Answer (QA) sites attract millions of users around the globe. On these sites, users ask questions while others provide answers. These QA sites vary by their scope, size, and quality of answers; the most popular QA site is Yahoo! Answers. This chapter aims to examine the quality of information produced by the crowd on Yahoo! Answers, assuming that given enough eyeballs all questions can get good answers. Findings illustrate a process of answer quality improvement through crowdsourcing questions. Improvement is achieved by having multiple answers to any given question instead of a single answer, and through a mechanism of answer evaluation, by which users rank the best answer to any given question. Both processes contribute significantly to the quality of answers one can expect to find on Yahoo! Answers.

An Empirical Analysis of Innovation Success Factors Due to ICT Use in Japanese Firms

ICT (Information and Communication Technology) has now become one of the most important sources of innovation, and it contributes to share information on innovation within the firm as well as between firms. The former is referred to as ICT use inside the firm, while the latter as ICT use outside the firm. The objective of the chapter is to analyze how innovation is enhanced by two categories of ICT use based on a survey conducted with respect to 2,260 unlisted Japanese industrial companies in January 2010. This survey asked how ICT is used among respondents and the number of patent applications, which is used as a proxy of innovation. After defining the index of internal innovation capability, how ICT use promotes internal capability and innovation are analyzed using probit estimation. Moreover, the study focuses on open innovation, and these analyses are applied for firms practicing open innovation.

The Role of Value Networks in the Design of Mobile Platforms

Unlike the simple mobile voice service, which is normally designed and developed by the telecom itself, the development of mobile data services and platforms, due to their complexity, usually requires a collaboration and cooperation amongst many actors within and outside the mobile telecommunication industry such as mobile network operators, content providers, content aggregators, payment gateways, regulatory commissions, and others. The actors usually form the so-called value network in which each actor complements others and adds important value elements to the final value proposition given that actors have different knowledge domains, backgrounds, and expertise. Contrasting value chains where the relationships amongst different parties are to some extent simple and linear, the relationships linking actors in value networks are mainly complex and non-linear, and such relationships had led to a shift from forming value chains to creating value networks in many digital economies such as the mobile telecommunication industry. Although it is argued that designing powerful value networks is critical to the success of mobile platforms, very limited research can be found on explaining and proving this argument. As such, this chapter intuitively utilizes a methodical approach to explain the role of value networks in the design of successful mobile platforms. This chapter demonstrates, through the case of iPhone, how a powerful and well-designed value network is a critical enabler of innovations in the mobile telecommunications industry. Further, the chapter argues that cohesion, fitting network-mode, uniqueness, and dynamicity are four key value drivers of powerful value networks.

Innovation in Business Models of Banks in Europe

Since the end of the 1990s, the introduction of Internet technology to the mainstream technologies used in businesses led to the expectation of pure Internet enterprises that might eliminate physical presence to one or more points in the value chain. A sequence of failures managed to resize those expectations and led most firms to just expose routine back end systems transactions through the Internet without a clear focus on relationship building or an integrated cross-channel sales approach. Despite the structural changes to the business level strategy that the Internet may have brought to firms in many industries, business practices in banking have not really evolved. This is because banks perceived Internet-based innovation as an investment opportunity that could raise spatial and temporal constraints much like ATMs had done in the past, without actually changing the value proposition of the business model or the strategic options of financial institutions. This chapter argues that the degree to which financial institutions have actually infused innovation into their traditional business model has been negligible and aims to set out a scene for the study of the evolution of strategy and business models of banks in the Internet era.

Knowledge-Based Economic Growth from the Social Context of Information Technology

Information systems have been touted as a key driver of economic growth in the modern world. Countries and regions alike have leveraged these powerful technologies to boost economic growth. In today’s knowledge-driven economy, information technologies are applicable to many industries as they can be harnessed to increase productivity and production. However, the ability to use these technologies to facilitate economic growth goes beyond the technologies per se. In this chapter, the author argues that the social context influences a region’s ability to create knowledge-based economic growth. Using case studies of three regions, the author argues that upskilling and isomorphism are important facets in a region’s social context that warrant consideration. The results are applicable to policy-making and contribute to the literature on social informatics.

The Information Technology Audit

As a critical component in almost every organization, Information Technology may provide services that allow the organization to function and in many cases allow the organization to achieve a competitive advantage. As technology costs and functionality rise, many organizations risk losing the perspective needed to ensure that their investment in technology is appropriate and well spent. This chapter discusses some auditing techniques that may help any organization to test their IT functions to make sure that the outcomes are appropriate given the costs of technology. After discussing the background of IT audits, several functional areas are discussed with example goals and suggestions for evaluating IT functions.

Understanding Outsourcing of Information Systems

Many decisions on IS investments have made during the past 20 years but yet, the extant literature does not provide a clear understanding of the phenomenon of IS outsourcing. This chapter answers two main questions relevant to researchers and practitioners: 1) What are the main findings so far in IS outsourcing literature? 2) What do we still need to learn? Through a comprehensive review of the literature, the authors offer systematization of the body of knowledge on outsourcing, its implications on firms’ boundaries, and the theoretical challenges. The MIS perspective appears to be very present, both by considering technology as part of the external environment and by exploring IS and IT as areas for important sourcing decision. In conclusion, implications for managers are drawn.

Valuation of Technology-Based Companies

The cash flows of technology-based companies show high degrees of uncertainty. As traditional valuation methods can hardly capture these characteristics, they are insufficient for valuing these kinds of companies. On the contrary, real options theory can quantify the value associated with management flexibility, growth opportunities, and synergies. This chapter assesses the corporate value of a technology-based company. By gathering information from historical cash flows and using Monte Carlo simulations, the chapter generates future returns paths and primarily uses them for valuations by discounted cash flow methods. The generated volatility is subsequently used to value the measurement carried out by real options theory. The value obtained under the real options binomial approach is about 40% higher than the one obtained by the discounted cash flow method. This difference can be attributed to the value associated with uncertainty and flexibility.