Exploring the Characteristics and Impact of Information Technology Crisis on a Company Ecehan Sofuoglu, Nuri Basoglu Bogazici University, Department of Management Information Systems, Istanbul, Turkey Abstract--Many companies do not usually consider the impact that a crisis can have on their business and also their employees. However, a crisis can be evoked by any situation or event that has detrimental effect on the business ranging from fire, technology outage, product withdrawal, rumours and natural disasters, to terrorism. Most companies think that they are prepared for a crisis as they have a business continuity plan in place but is this enough? Especially if a crisis related to ‘Information Technology’ infrastructure happens, how should the management act in order to prevent or minimize any damage to business continuity, its long term brand reputation and the negative impact on its employees? In this paper, a case study of an International Company in a turbulent environment will be discussed. The goal is to conduct an ‘impact analyses’ of the crisis in the Information Technology department and how it affected daily business, processes and employees. Which decisions were taken, what were the results? Possible alternative decisions, preventions for future similar situations will be also discussed. I. INTRODUCTION This study is a case of an international American company in a turbulent environment. A crisis situation where IT department was affected and the effects of this IT crisis on business will be analyzed. We will analyze the effects through a variable analysis of a previous study - the variables of IT which bring advantages to companies. We will evaluate how these variables had been affected by the crisis and try to find out if IT really brings these advantageous effects to business or not. In the literature, there are not many effects analysis of crisis on IT departments and their effects to business. So this would be one of the first studies in this area. II. LITERATURE REVIEW The impact of IS (Information Systems) on the whole business of a company is undeniable. Today many organizations consider IT an essential component of worldwide corporate strategy. The key finding of Landmark MIT study [7] is that IT is now a vital resource for competing the global marketplace. There is a model of Palvia [14] which is in fact an extension of a research conducted by Mahmood and Soon [8]. They developed a model and instrument for assessing the strategic impact of IT in a business organization but in the national/domestic context. Palvia [14] extends this model to assess the strategic impact of IT on a global organization engaged in international business. The model’s name is GLITS (Global IT Strategic Model). This model provides a validated process for explaining and measuring the strategic and competitive impact of IT at the global level. It would be considered as a generic form of standard IT impact measurement model and instrument. In this paper, we will talk about a case study of a global American company office in an Eastern Europe country, how a crisis situation affected IT department and then how crisis in IT affected the whole business. When we talk about the effects, we will evaluate them through Palvia’s GLITS model. The company, especially IT department being affected by the crisis, how the business mainly affected from that and according to which variables affected, GLITS model could be revaluated in a crisis situation. That model has two streams of literature; - General literature on the use of IS as a competitive weapon; Strategic IS for competitive advantage (SIS) - International IS. The authors, dealing with specific aspects of global IT had been investigated. After speaking about IT department, it’s importance and effects in company and business, we also have to speak about crisis. Although the definitions can vary greatly, three elements are common to most definitions of crisis: (a) a threat to the organization, (b) the element of surprise, and (c) a short decision time [16] According to Booth [1], a crisis is ‘a situation faced by an individual, a group or an organization, which they are unable to cope with, by the use of normal routine procedures and, in which stress is created by sudden change’. Various authors like Fink [3] and Heath [5] also describe crisis as a period of sudden change during which a totally new system is formed; stressing on the fact that the meaning of crisis does not only cover risk, uncertainty, threat, conflict, accident, and instability but also covers opportunity. When we talk about crisis, management of it also gains importance. According to Ocal et all [13], crisis management is a dynamic and continuous process that includes both proactive and reactive actions with the aim of identifying the crisis, planning a response to the crisis, confronting the crisis, and resolving the crisis. Crisis management process constitutes three main periods that are before, during and after the crisis; management before the crisis; management during the crisis and management after the crisis. According to Penrose [15], reviews of crises and crisis plans typically include four common elements: the plan, the management team, communication, and post-crisis PICMET 2008 Proceedings, 27-31 July, Cape Town, South Africa (c) 2008 PICMET 811