Developments in Management Information Systems and Product Design: Structural  Implications and Failure Reduction

Dr. Terence Love

We-B Research Centre
Edith Cowan University


This paper draws attention to a shift in the relationship between the fields of Management Information Systems and Product Design due t: new developments in the roles of corporate vision, mission and strategy; increased emphasis on brand and image in marketing and business success; the broadening conceptualisations of product and designer; the increased use of outsourcing and virtual organisations; and increased intra- and Inter-networking of computerised information systems.  The paper concludes, inline with recent moves by major software developers such as SAP, IBM, PTC, Dassault Systemes and Fujitsu-Seimens, that Management Information Systems is conceptually best regarded as a sub-field of a extended discipline of Product Design.

Keywords: Product Design, Management Information Systems, design management, design failures


This paper describes how changes impacting on Management Information Systems (MIS) and Product Design imply the need for a conceptual review of the relationships between them. It suggests the traditional conceptualisation of their relationship is partly responsible for the high levels of failure in MIS systems. Addressing this issue is important, therefore, because of its potential contribution to reducing the high levels of economically and socially costly failures of management information systems implementations (see, for example, Gottlieb & Salzman, 2000; Kumar, Dissel, & Bielli, 1998; Lyytinen, Mathiassen, & Ropponen, 1998; Rocheleau, 1997).

These serious levels of failure of management information systems contrast with the relatively low levels of failure in projects in other design fields, many of which involve greater financial value or complexity. Differences can be seen in many dimensions when comparing for example, the frequent failures and cost overruns in information system developments in industry and government with the low failure rates in the designs of complex products. Practical evidence is the contrast between the high failure rates in information systems in areas such as banking, air traffic control, e-commerce, student admissions, insurance, and Defence, with the low failure rates of very large scale product design developments in spacecraft, aircraft, motor vehicles, oil and gas extraction and refining, computer hardware, and civil engineering.

During the 1990s, Petroski (1996; 1996; 1992) investigated design failures across a broad front of disciplines and concluded the main reasons for failures lay in design processes, especially where designers did not make explicit their tacit knowledge to enable learning for further improvement (Friedman, 2002). In management information systems design, the focus has been primarily on the technical characteristics of the design problem and its solution (Kumar et al., 1998), and key issues in Product Design, the qualitative human activities of designing and the underlying personal attitudes and human factors of stakeholders, users and other constituents, have remained tacit or poorly represented in MIS design processes (Gottlieb & Salzman, 2000; Malhotra, 2001; Roepke, Agarwal, & Ferratt, 2000). Most failures of information systems have arisen from this neglect of these rather than technical issues (Kumar et al., 1998; Lyytinen et al., 1998; Malhotra, 2001). Product design processes address these neglected human issues as a matter of course. This suggests significant improvements to management information systems are possible if the designing of future management and other information systems is undertaken in a product design milieu and under the guidance of experience product design managers.

Management Information Systems and Product Design: Historical Perspective

Until recently, the fields of Management Information Systems and Product Design have been regarded as essentially distinct. Management Information Systems has focused on software and data systems that provide management with traditional information and metrics about sales, purchases, stock levels, payroll, and other aspects of a business chart of accounts (Power, 2002). In contrast, Product Design has focused on technical and aesthetic issues associated with products and services; design process methods; and computer-based support tools for designers (see, for example, CIPD, 2002).

From this traditional viewpoint, the characteristic organisational features of both Management Information Systems and Product Design departments originated in organisational theories focusing on  organisational structure and business functions. Management Information Systems departments provide services (computer networked information systems) to other departments and to upper management and are often regarded as being associated with management functions. Product Design departments, in contrast, are traditionally regarded as lower level organisational units that take instructions from, and report to, higher management layers whilst providing a service (creation of drawings) handed ‘over the silo wall’ to production departments. MIS departments differ from Product Design departments in terms of their closeness in working relationship with management because of their role in supplying information to managers.

A key factor in the evolution of Product Design from its earlier traditional role is the understanding that the concept of a product (a thing produced) includes all human outputs in physical and abstract domains. These include organisational structures, business enterprises, marketing plans, management processes, government policies, information management heuristics, theories, maintenance plans, social and educational programs, and other systems and services. The field of Product Design contains an extensive range of design methods and theories that address most aspects of human design activity. Historical reasons, however, have meant that in a few design domains - such as management information systems – product design tools elsewhere regarded as essential have not been used. This shortfall in design methodics and perspective correlates with the reasons identified for failures of designed outcomes.

New Developments in the Management of Organisations

The above traditional descriptions of Management Information Systems and Product Design are based on a perspective on organisations that places great emphasis on managers’ experience and skills as key enablers of business success. Increasingly, however, it has become recognized that day-to-day management experience and skill is of less than expected value in achieving business success (see, for example, Malhotra, 2001; Wolstenholme, 1990, p. 29). The field of System Dynamics with its emphasis on designing systemic solutions, and the systematic design methodology movement emerging from the 1962 design conference in the UK (Jones & Thornley, 1963), brought attention to the need to move away from ad-hoc organisational solutions based on managers’ skills and experiences and towards designing improved forms of organisation, enterprise and their management (Forrester, 1998). Modern business organisational theory has moved away from ‘ongoing management’ and towards designing business structures and processes that require reduced levels of day-to-day management (for example, Grant & Huston, 2000; Mohrman, 2001). In effect, this new perspectives places much greater emphasis on designing organisations that are intrinsically successful. The new approach is perhaps most obvious with respect to virtual organisations that utilize computer automated transactional processes, which depend on prior design of structures and organisational process that requires minimal management intervention.

New Developments in Product Design

Traditional perspectives focusing on ‘spheres of managerial responsibility and compartments of activity rather than on processes’ (Wolstenholme, 1990, p. 29) have resulted in a view of Product Design that is limited in scope (Love, 2002, 2002). Conceptually, this is at odds with, and much narrower than, the broad picture of Product design found in the field of Design Research and espoused by many designers and design researchers For example, Simon (1969) defined designing as a planning activity aimed at achieving preferred outcomes, and Jones (1970) defined design as initiating changes in man [sic]-made things (see, also, Friedman, 2002; Love, 2002)

Recently, this broader picture of Product Design’s central role in human endeavour and business processes has begun to be more widely accepted (see, for example, Bauch & Magura, 2002), which appears to be a result of several factors including:

·         Increased understanding of the ways that Product Design activity shapes the brands and images of organisations and products. In parallel is increased awareness of the important contribution of  Product Design through value chains to improve organisations economic success and sustainability  (this appears to have developed first in Publishing and Graphic Design fields, and then more recently in Product Design).

·         An expansion of the definition of ‘product design’ to include the designing of organisations, enterprises, services, systems (perhaps most evident in the designing of virtual organisations, and in designing solutions in communication and informatic domains).

·         Increased awareness of importance of product design processes in successfully addressing environmental considerations (in, for example, the field of eco-design).

·         Increased awareness of the importance of using the research methods of Product Design for understanding how users/consumers interact with actualized products of design processes. This is based on design research in the areas of, for example, ergonomics, human factors, user interface research, useability, health and safety, and marketing.

Brand, Image and Business Success

Brand and image are central issues in business success (Hutton, 2001). Developments in Marketing have lead to increased emphasis on brand and image in terms of the products, systems and services an organisation offers, and in terms of the organisation itself - as held in the minds of business constituents whether upstream, downstream or alongside (e.g. collaborative) (MORI, 2002; Tellefsen, 1999, 1995). For most businesses, constituents that lie outside their boundary interact with the business through its products systems and services. These shape outsiders’ views of the business and their assessment of the value interacting with the business offers to them.  Product designers, as designers of products, systems, services and the organisation itself, make the choices that define the brand and image characteristics of a business and its value-added outputs. In many cases, upper management undertakes many of these product design roles – particularly with respect to institutional and organisational design issues.

At grass roots level, Marketing consists of identifying wants and needs of likely constituents to support the designing of a business solution. This activity supports economic and other organisational development including organisational and individual learning (hence, in turn improving product design) (Tellefesen & Love, In Press; Tellefsen, 2001). In addition, are marketing strategies that are part of a broader design brief, and whose purpose is to inform those staff actively involved in persuading constituents to exchange value on the open market to the benefit of the organisation (e.g. advertising and sales departments). In contemporary product design activity, planning for these latter processes, along with investigations into the characteristics of costs and resources available, is usually undertaken very early on in the designing of a product, system, service or enterprise.

Management Information Systems and Product Design address issues of image and brand differently. Management Information Systems typically focuses on information systems processes, and information hardware and software architectures that facilitate how upper management’s choice of image and brand emerge through mission and strategies into management processes. In this sense, management information systems are instruments of the product design processes. In contrast, Product design activities reach to the heart of activities of upper management in that product design activity is the means by which the image and brand are created. Product design is also part of the process by which an organisation or enterprise is itself designed as a ‘product’,  in the sense that Jay Forrester coined the term ‘enterprise designer’ (Forrester, 1998). The essence of enterprise, therefore, is in most cases what is created through its product design processes.

Management information systems have a significant role in the propagation of the images and brands of an organisation and its products and services. In failure terms, however, a major issue is to avoid the significant negative impact on a business’s image and brand though malfunction – particularly when it involves management information systems (e-commerce for instance) oriented to, and used by, outside constituents and will give these constituents an adverse impression of the capabilities of the business. This is another aspect of the failure problems associated with management information systems. In essence it is a design issue rather than an issue specific to Management Information Systems theory, because choosing management information systems, and the ways that they are installed and maintained, are considerations central to designing a management information system as a ‘product’, paid for and used by the internal and external business constituents.

Intra and Inter-networking Developments

The early origins of the field of Management Information Systems predate the use of computers, but a convenient ‘birth date’ for modern Management Information systems using computers is the work initiated at the Lyons retail organisation in the UK in 1949 (Land, 1998). Recent changes in network technologies have resulted in the widespread uptake of local area, wide area and Inter-network systems. These developments have supported the geographic dispersal of business processes and management information systems and reduced the need for management information systems to be tightly located around a company mainframe. Middle-ware software services have been developed that support coordination and integration between different proprietary or legacy software applications and hardware platforms, and at the largest scale, Enterprise resource planning programs (ERP) as provided by SAP ( and other business system integrators provide a primary rather than supporting role. These ERP systems are a key Management Information System initiative, improving the efficiency and effectiveness of business processes, and have, until recently, been regarded as the ultimate business system integrator bringing together payroll, inventory, sales, invoicing, accounting, finance, asset management, customer relationship management and purchasing systems.

The dominant effect of computer network systems on Product Design is, as in Management Information Systems, increased freedom in geographic location. In Product Design processes this allows flexibility in location of subsidiary design processes. It also amplifies the benefits as product design methods and approaches are increasingly applied to processes such as: market research; corporate image management; internal and external documentation; packaging; distribution processes; manufacturing processes; stockholding; environmental management; innovation program; asset and plant purchase and maintenance; design management; end of life issues; and all the accounting and financial processes associated with designing a particular product, system, service or organisational structure, whether used in the business or by one of the business’s constituents. Local area, wide area and Inter-networking has enabled the extension of integrated Product Design (and included business processes) under large scale integrating paradigms such as Product Lifecycle Management and Collaborative Lifecycle Management. Improvements to networking have also supported the design of well-integrated supply and value chain relationships with, e.g. tiered preferred suppliers and distributors. In addition, the relatively recent large increases in available Internet bandwidth have opened the possibility for real time product design processes that can involve remote manipulation of manufacturing plant. For example, automotive engine designers in (say) the UK can change in real time how engines they have designed are being manufactured in (say) China by using Computer Aided Manufacturing (CAM) or Computer Aided Engineering (CAE) design processes to make real time changes to settings on automatic machining systems making engine components. Another major gain in product design from networked information is the enabling of geographically separated concurrent engineering (CE) processes by which an organisation can be created, and production and service processes designed and built, at the same time that research is being undertaken to identify characteristics to design the product, system, services and distribution processes. These concurrent product design processes are relatively commonplace and go back to the early 1930’s in large-scale engineering enterprises (Spoerre, 1999), although are relatively unutilized in other business domains.

Developments in Outsourcing and virtual organisations

The increased flexibility provided by computer-networked management information systems has been a key factor in the increased prevalence of outsourcing arrangements because of its role in reducing management transaction costs particularly where these are time dependent. It has resulted in outsourcing becoming a major topic within the Management Information Systems literature and a common focus for conferences. Surprisingly, in view of the information focus of Management Information Systems, much of its literature on outsourcing is concerned with issues that might be more properly dealt with in other fields such as Management and Accounting. The development of middle-ware and enterprise resource planning software has not only enabled integration of software and hardware systems and services within an organisation, but also between organisations. This removed or reduced one of the main technical barriers to the success of mergers, acquisitions, and outsourcing arrangements. It has led increasingly to a natural extension of these arrangements, the formation of virtual businesses. These ‘virtual organisations’ consist in some cases almost exclusively of outsourced services held together by management information systems especially large scale, web-enabled integrating software packages such as ERP systems.

In Product design, there is a long tradition of the use of outsourcing and virtual organisation arrangements, especially in engineering domains. They predate similar developments in Management Information Systems by at least 20 years. The historical  context is that designers of products, systems services have made arrangements between geographically and economically separate business units for many centuries (the origins of contractual law might be seen as founded in resolving the practical issues involved in bringing together the elements of virtual organisations in order to achieve success in production-based commercial outcomes). In developing optimal design solutions, the location of different aspects of a design’s ‘production’ is a key issue, and ‘outsourcing’ has for several centuries been an element of that product design discourse. A part of the outsourcing issue, in design terms, is the actualization of information and communication analysis processes to support organizationally remote arrangements that form parts of a designed business solution, and this includes the design, or choice, of appropriate management information systems.

Many virtual organisations are, in essence, an extension of outsourcing arrangements. Several different morphologies of physical arrangements are possible for virtual organisations, sometimes best categorized in terms of the contractual arrangements between constituents (Burn & Tetteh, 2000; Lethbridge, 2001; Tellefsen & Love, In Press; Tellefsen & Love, 2001). Like outsourcing, virtual organisations have become a staple of early 21st century Management Information Systems’ literature. Again, like outsourcing, the Management Information Systems literature is marked by issues that lie outside the traditional information focus of the field, and might be more properly be considered as aspects of other disciplines such as: Management, Accounting, Marketing, Strategic Leadership or Computer Science.

Implications of New Developments

Two factors emerge from the above analyses. First, it is becoming increasingly clear that there is a relationship between Management Information Systems and Product Design as a result of new developments in, e.g. corporate vision, mission and strategy; increased emphasis on brand and image in marketing and business success; the broadening conceptualisations of product and designer; the increased use of outsourcing and virtual organisations; and increased intra- and Inter-networking of computerised information systems. The idea that they are essentially unrelated is illusory and appears to have resulted from early organisation models and theories. Second, the main focus (and core competence) of research, practice and education in the field of Management Information Systems is the designing of management information systems: management information systems are products, sometimes designed for use by internal clients (managers and workers), and othertimes by external constituents of a business (customers, supplies, partners etc).

The above analyses suggest that there are likely to be advantages in regarding Management Information Systems as a sub-field of Product Design.  The high levels of failure, and explanations of these failures (mainly neglect of human factors), are consistent with the idea that MIS professionals are involved in Product Design without using the skills and processes that other product design professionals have found to be essential to achieving high levels of success, and avoiding cost overruns and design failures. The implication is straightforward:

Designing management information systems, the focus and core competence of the field of Management Information Systems, is better conceptualised as an element of Product Design.

There is some urgency in addressing these issues because the large-scale nature of management information systems and their failures in both public and private sectors have significant social and economic costs. Attempts to improve the situation and through improving existing information systems design methods are unlikely to be successful because, culturally, management information systems approaches do not yet emphasise or include many key areas found to be essential to success in Product Design. In addition, the expansion of Management Information Systems design methods is unlikely because its information-based foundations epistemologically exclude many of the key human issues identified by Petroski and others quoted earlier, as being essential to reducing design failures.

Software Development in Management Information Systems and Product Design

Major management information systems application software providers such as SAP and IBM have recently brought to market first-generation enterprise level software that echo the proposal presented in this paper. These new product design process software products include, and provide substantial added functionality to, all that was previously provided under ERP systems. Recent software developments include the Product Lifecycle Management software of SAP (SAP, 2002) and IBM (IBM, 2002), Collaborative Product Commerce software of PTC (PTC, 2002), and the Collaborative Lifecycle Management software of Fujitsu-Seimens (Fujitsu-Seimens, 2002), all of which provide an overarching Product Design software environment within which enterprise resource planning, business intelligence, supplier relationship management, design support services, and customer relationship management software are situated and have their independent roles. A typical scenario for PLM software is shown below modeled on that of Fujitsu-Seimens.

Overarching product development management frameworks such as PLM have been particularly attractive in the USA and Europe where there is increasing environmental pressure to address product end-of-life issues such as the disposal of cars and computer monitors. Although originating as an eco-design initiative, the concept of PLM has been extended significantly to include most if not all the positive and negative factors that result from the design and diffusion of a product system, service or organisation (Bauch & Magura, 2002; Davis, 2002). Its methods include organisational, technical and business product design processes used by the over 200 different disciplines of designers that may be employed by a global enterprise and needed to realise high levels of business, environmental and human sustainability.

By developing PLM and similar software as a conceptual basis within which other business software such as ERP are located, enterprise-scale software organisations, have made a clear commitment to the idea that Product Design provides the core conceptual functionality in managing business processes.

Summary and Conclusions

This paper has proposed that there are significant benefits in redefining the relationship between Management Information Systems and Product Design. The underlying premise of the paper is straightforward:

Designing management information systems, the focus and core competence of the field of Management Information Systems, is better conceptualised as an element of Product Design.

Implicit in this are changes in focus of the practice of MIS practitioners; changes in research focus for MIS, and changes in MIS education programs. The proposal is supported by analysis of developments in key areas impacting on both fields; by the evidence of and need to address Management Information Systems’ high levels of design failure compared to other product design fields; and by the widespread support evident in recent product developments of enterprise software providers (e.g. SAP, IBM, PTC and Fujitsu-Seimens) who have now swung firmly behind Product Design as the core of business improvement and reengineering and of Management Information Systems.

In the short term, two ways forward are:

·         Undertake management information system design activities only within a Product Design process and under the guidance of experienced Product Design managers.

·         Include significant proportion of appropriate Product Design theory and practice in Management Information Systems curricula.


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