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OSU BA 371 - Making a Difference

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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 ProductivityBrynjolfsson & 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 ParadoxMorgan 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 ROIProductivity Matters…but isn’t everythingBrynjolfsson & 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 ShareMeasuring IT ROI is difficult and may include more than a measure of productivity in the short term.Productivity GrowthBrynjolfsson & HittProductivity 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 RedesignIdentify problems (“opportunities for improvement”).Cost-Benefit AnalysesManagement SupportEmployee ResistanceProcess RigidityPrevious IT InvestmentLaws & RegulationsFunctional 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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OSU BA 371 - Making a Difference

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