Information Technology and the Productivity Paradox: by Henry C. Lucas Jr.

By Henry C. Lucas Jr.

From networks to databases, e mail to voicemail, the quantity of capital being invested in info expertise every year is striking. by means of 1996, U.S. agencies have been spending greater than $500 billion each year on software program, networks and employees. The lately merged financial institution of the US and NationsBank have an preliminary IT price range of four billion money. As companies like this push quickly into the company global of the twenty first century, the query has remained: how do enterprises degree returns from those immense investments in details know-how? Henry C. Lucas, successfully solutions this question via supplying an inventive and trustworthy framework for measuring the aggressive merits and earnings received via investments in state of the art details platforms. there's worth in info expertise, and it really is attainable to teach returns, Lucas argues--unfortunately this worth simply does not consistently appear sincerely at the base line of a ledger. In 5 expertly awarded sections, he spells out precisely what companies can count on from their info expertise investments--some investments create a measurable worth, a few don't, yet all are vital still. via an exact mixture of frameworks and versions, similar to an funding possibilities Matrix, and punctuated with genuine examples from profitable companies, this can be the 1st e-book to permit executives to determine precisely how their info know-how funding could be anticipated to come price, thereby maximizing their merits in an age of worldwide competitiveness. certainly, organisations who deal with their details platforms so much successfully are most suitable to achieve a swiftly evolving market. With quite a bit at stake, info expertise is sure to be the basic advisor for corporations decided to compete and flourish within the hugely aggressive economic system of the subsequent century.

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For the past few years the value of stocks in the United States has risen rapidly. Investment banks and brokerage firms are experiencing record profits; what kind of evidence would you need to believe that these profits came from, or at least were partially due to, investments in information technology rather than the strong stock market? IT in the Valve Industry One way to provide stronger evidence than data from a single company is to look at a group of firms. The researcher gains some control by concentrating on the firms in a single industry.

A more likely scenario is that a long-lived application of technology moves from one investment type to another as it matures and as the organization faces the decision to make additional investments in the application. It would have been very difficult for airline managers to foresee the development of airline CRS in the late 1950s when they made their first investments in this technology. In the 1970s when American and United made an investment to deploy terminals to travel agents, managers could make an argument for a direct return based on bookings fees.

Investments in different types of information technology 2. Measures of organizational performance 3. Conversion effectiveness (the ability to convert IT investments into productive applications) Data for the study came from the CEO, controller, and production manager in each firm. They responded to questions about three categories of IT investments: strategic, informational, and transactional. A firm undertakes strategic applications to provide a competitive advantage through increased sales and/or market share.

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