Case Scenario:
Wright Company employs a computer-based processing system for maintaining all company records. The present system was developed in stages over the past 5 years and has been fully operational for the last 24 months.
When the system was being designed, all department heads were asked to specify the types of information and reports they would need for planning and controlling operations. The system department attempted to meet the specifications of each department head. Company management specified that certain other reports should be prepared for department heads. During the five years of systems development and operations, there have been several changes in the department head positions due to attrition and promotions. The new department heads often made requests for additional reports according to their specifications. The systems department complied with all these requests. Reports were discontinued only on request by a department head and then only if it was not a standard report required by top management. As a result, few reports were, in fact, discontinued. Consequently, the data processing system was generating a large number of reports each reporting period.
Company management became concerned about the quantity of information that was being produced by the system. The internal audit department was asked to evaluate the effectiveness of the reports generated by the system. The audit staff determined early in the study that more information was being generated by the data processing system than could be use effectively. The noted the following reactions to this information overload:
(1) Many department heads would not act on certain reports during periods of peak activity. The department head would let these reports accumulate with the hope of catching up during a subsequent lull.
(2) Some department heads had so many reports that they did not act all on the information, or they made incorrect decisions because of misuse of the information.
(3) Frequently, action required by the nature of the report data was not taken until the department head was reminded by someone who needed the decision. These department heads did not appear to have developed a priority system for acting on the information produced by the data processing system.
(4) Department heads often would develop the information they needed form alternative, independent sources rather than using the reports generated by the data processing system. This often was easier than trying to search among the reports for the needed data.