Slide 1A question for you…What is ProductivityIT’s “Dirty Little Secret”Measuring IT ROIProductivity GrowthSo Now What?… A N D K N O W I N G I T …Making a DifferenceA question for you…What main advantage do you think technology provides a business?What is ProductivityBrynjolfsson & Hitt: “…the amount of output produced per unit of input.”Kock: “(production capacity)/(production cost)”Problem with amount produced… what if demand is low?Brynjolfsson & Hitt: “Properly measured, output should include… the value created for consumers.” Kock: “…quality and productivity are interrelated…”How to Measure it? More to come…IT’s “Dirty Little Secret”Technology Productivity ParadoxMorgan Stanley's chief economist Steven Roach, 1987 study "America's Technology Dilemma: A Profile of the Information Economy"Particularly in the Service Sector productivity was stagnant, yet IT investments soared.Banking and Insurance were especially lacking.Is IT investment a bad idea?Is productivity everything?Measuring IT ROIProductivity Matters…but isn’t everythingBrynjolfsson & Hitt: IT has a strong positive relationship to revenues.Kock: a decrease in productivity matched with an increase in revenue is acceptable.Brynjolfsson & Hitt: “…value depends increasingly on product quality, timeliness, customization, convenience, variety and other "intangibles".”Kock: Early Adopters of ATM’s and Market ShareMeasuring IT ROI is difficult and may include more than a measure of productivity in the short term.Productivity GrowthBrynjolfsson & HittProductivity growth isn’t from working harder“Productivity growth comes from working smarter.”“general purpose technologies” Steam Engine, Electricity, today: IT.Ultimately: IT increases productivity as a tool for improved business process. IT on its own doesn’t increase productivity, only when it is coupled with working smarter.Productivity should be impacted in the long run…Result of organizational change enabled by ITSo Now What?Select a Business Process for RedesignIdentify problems (“opportunities for improvement”).Cost-Benefit AnalysesManagement SupportEmployee ResistanceProcess RigidityPrevious IT InvestmentLaws & RegulationsFunctional Heterogeneity (relates to regulation)Project Success Factors% of Responses1. User Involvement 15.9%2. Executive Management Support13.9%3. Clear Statement of Requirements13.0%…
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