Analysing Business Losses Caused by Information Systems Risk: A Business Process Analysis Approach

Abstract

Increased reliance on computers by many companies and public organisations has generated a business risk for them. For example, problems in systems availability can lead to additional cost in operations, lost revenues and competitive losses. Systematic analyses are needed to avoid such losses. Prior research provides rigorous methods for identifying information systems risks and reducing the likelihood of these risks. The analysis of potential business losses in the user organisations has, however, received only limited attention. The objective in this paper is to investigate methods that can be used in the systematic identification of potential losses in the user organisation. The paper provides a review of prior literature on methods that can be used to analyse and report such losses. One understudied method is business process analysis that entails a systematic analysis of potential losses in different phases of the organisation's core business processes. Action research was used to examine the use of business process analysis as a method to associate information systems availability risk with potential business losses. The analysis was carried out in two different companies, one operating in the paper industry and the other one in the finance sector. The study contributes to research by summarising prior research on the analysis of business losses and by illustrating how the use of one method, business process analysis, assisted the client organisations. Perhaps most importantly, it identifies a new topic that has received very little attention in information systems research, despite its obvious managerial and practical significance.