IT Payoff  EndNote Library

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Ahituv, N. and R. Giladi (1993). Business Success and Information Technology: Are They Really Related. Proceedings of the 7th Annual Conference of Management IS, Tel Aviv University, Israel.

Allen, T. J. and M. S. Scott Morton (1994). Information technology and the corporation of the 1990s : research studies. New York :, Oxford University Press,.

Bagozzi, R. P. (1977). "Structural Equation Models in Experimental Research." Journal of Marketing Research 14: 209-236.

Baily, M. N. (1986). "What Has Happened to Productivity Growth?" Science 234: 443-451.

Bakos, Y. and E. Brynjolfsson (1999). "Bundling information goods: Pricing, profits, and efficiency." Management Science 45(12): 1613-1630.

            We study the strategy of bundling a large number of information goods, such as those increasingly available on the Internet, and selling them for a fixed price. We analyze the optimal bundling strategies for a multiproduct monopolist, and we find that bundling very large numbers of unrelated information goods can be surprisingly profitable. The reason is that the law of large numbers makes it much easier to predict consumers' valuations for a bundle of goods than their valuations for the individual goods when sold separately. As a result, this "predictive value of bundling" makes it possible to achieve greater sales, greater economic efficiency, and greater profits per good from a bundle of information goods than can be attained when the same goods are sold separately. Our main results do not extend to most physical goods, as the marginal costs of production for goods not used by the buyer typically negate any benefits from the predictive value of large-scale bundling. While determining optimal bundling strategies for more than two goods is a notoriously difficult problem, we use statistical techniques to provide strong asymptotic results and bounds on profits for bundles of any arbitrary size. We show how our model can be used to analyze the bundling of complements and substitutes, bundling in the presence of budget constraints, and bundling of goods with various types of correlations and how each of these conditions can lead to limits on optimal bundle size. In particular we find that when different market segments of consumers differ systematically in their valuations for goods, simple bundling will no longer be optimal. However, by offering a menu of different bundles aimed at each market segment, bundling makes traditional price discrimination strategies more powerful by reducing the role of unpredictable idiosyncratic components of valuations. The predictions of our analysis appear to be consistent with empirical observations of the markets for Internet and online content, cable television programming, and copyrighted music.

Bakos, Y., E. Brynjolfsson, et al. (1999). "Shared information goods." Journal of Law & Economics 42(1): 117-155.

            Once purchased, information goods are often shared within small social communities. Software and music, for example, can be easily shared among family or friends. In this paper, we ask whether such sharing will undermine seller profit. We reach several surprising conclusions. We find, for example, that under certain circumstances sharing will markedly increase profit even if sharing is inefficient in the sense that it is more expensive for consumers to distribute the good via sharing than it would be for the producer to simply produce additional units. Conversely, we find that sharing can markedly decrease profit even where sharing reduces net distribution costs. These results contrast with much of the prior literature on small- scale sharing, but are consistent with results obtained in related work on the topic of commodity bundling. Our findings highlight the relative importance of demand reshaping, as opposed to cost considerations, in determining the profitability effects of sharing.

Barua, A., C. Kriebel, et al. (1991). "An Economic-Analysis of Strategic Information Technology Investments." MIS Quarterly 15(3): 313-331.

Barua, A., C. H. Kriebel, et al. (1995). "Information Technologies and Business Value - an Analytic and Empirical-Investigation." Information Systems Research 6(1): 3-23.

            An important management question today is whether the anticipated economic benefits of Information Technology (IT) are being realized. In this paper, we consider this problem to be measurement related, and propose and test a new process- oriented methodology for ex post measurement to audit IT impacts on a strategic business unit (SBU) or profit center's performance. The IT impacts on a given SBU are measured relative to a group of SBUs in the industry. The methodology involves a two-stage analysis of intermediate and higher level output variables that also accounts for industry and economy wide exogenous variables for tracing and measuring IT contributions. The data for testing the proposed model were obtained from SBUs in the manufacturing sector. Our results show significant positive impacts of IT at the intermediate level. The theoretical contribution of the study is a methodology that attempts to circumvent some of the measurement problems in this domain. It also provides a practical management tool to address the question of why (or why not) certain IT impacts occur. Additionally, through its process orientation, the suggested approach highlights key variables that may require managerial attention and subsequent action.

Barua, A., C. H. S. Lee, et al. (1996). "The calculus of reengineering." Information Systems Research 7(4): 409-428.

            Advances in new Information Technologies (IT) and changes in the business environment such as globalization and competitive pressure have prompted organizations to embark on reengineering projects involving significant investments in IT and business process redesign. However, the evidence of payoff from such investments can be classified as mixed as' best, a problem we partly attribute to the absence of a strong theoretical foundation to assess and analyze reengineering projects. We seek to apply complementarity theory and a business value modeling approach to address some questions involving what, when, and how much to reengineer. Complementarity theory is based on the notion that the value of having more of one factor increases by having more of another complementary factor. Further, related developments in the optimization of ''supermodular'' functions provide a useful way to maximize net benefits by exploiting complementary relationships between variables of interest. Combining this theory with a multi-level business value model showing relationships between key performance measures and their drivers, we argue that organizational payoff is maximized when several factors relating to IT, decision authority, business processes and incentives are changed in a coordinated manner in the right directions by the right magnitude to move toward an ideal design configuration. Our analysis further shows that when a complementary reengineering variable is left unchanged either due to myopic vision or self-interest, the organization will not be able to obtain the full benefits of reengineering due to smaller optimal changes in the other variables. We also show that by increasing the cost of changing the levels of design variables, unfavorable preexisting conditions (e.g., too much heterogeneity in the computing environment) can lead to reengineering changes of smaller magnitude than in a setting with favorable conditions.

Barua, A. and B. Lee (1997). "An economic analysis of the introduction of an electronic data interchange system." Information Systems Research 8(4): 398-422.

            Although electronic data interchange (EDI) holds the promise of significantly increasing the efficiency of business transactions, an installed base of proprietary implementations has been detrimental to the widespread acceptance of the technology. Thus, an important research issue involves strategies for facilitating EDI adoption. We analyze the introduction of an EDI system in a;vertical mark;et involving one manufacturer and two suppliers. The manufacturer initiates an EDI network, and penalizes a supplier for not joining the system by reducing its volume of business with the supplier. Along with a "stick," the manufacturer can also use a "carrot" in the form of a subsidy to partially offset a supplier's setup cost. The competition between the suppliers is characterized by incentive types for joining the EDI system ("motivating" or "threatening") and the Information Technology (IT) efficiency ("efficient" or "inefficient"). We show that regardless of its cost structure, a supplier may have to join the EDI network out oi "strategic necessity," due to the presence of an IT- efficient supplier, Our analysis further shows that depending on the supplier competition structure, the EDI system may prove to be a "beneficial" strategic necessity for a large supplier and an "unfortunate" strategic necessity for a small supplier. Another key result is that by increasing the severity of the penalty, both the manufacturer and the follower supplier can be worse off under certain conditions, The analysis of subsidy strategies reveals that unless leadership and followership positions are reversed due to a subsidy, subsidizing a supplier has no impact on the joining time of its competitor. Thus the EDI initiator cannot induce both, suppliers to join earlier by subsidizing one supplier, Also, the larger the slack capacity of the leader, the higher (lower) the manufacturer's incentive to subsidize the leader (follower). These results offer insights for initiators and adopters regarding penalty and subsidy strategies, impact on competition structure,joining decisions and network growth.

Barua, A., R. Ravindran, et al. (1997). "Coordination in information exchange between organizational decision units." Ieee Transactions On Systems Man and Cybernetics Part a-Systems and Humans 27(5): 690-698.

            The information technology (IT) infrastructure of today's organization is often one of distributed networked computing, with a flexible architecture to incorporate diverse software and hardware components to meet the needs of different user groups, One problem that may be encountered in this environment is the lack of information exchange across user groups or teams because of incompatible data definitions, diversity of formats, and differences in information processing capabilities and IT resource allocation across the organization. Successful information flows involve a user group providing information attribute levels (e.g., levels of precision or detail, timeliness, etc.), data definitions, formats and presentation styles required by the recipient group(s). When information exchange occurs without a fat between the attribute required and that provided, we have the problem of ''information coordination,'' It is thus critical to design and implement a set of organizational mechanisms which will encourage units within an organization to share relevant information in a coordinated manner. We develop a stylized model of coordination based information exchange between two decision units, and show that structured communication regarding the units' intended information sharing choices can partly mitigate the problem of coordination. When there is uniformity in information management capability and IT resources across the organization, the positive impact of such communication is reinforced, These results imply an emerging role of MIS, where the latter functions as a coordinator of communication and understanding between interdependent decision units, and a faciliator of equity in information processing capability across the units.

Barua, A., S. Ravindran, et al. (1997). "Effective intra-organizational information exchange." Journal of Information Science 23(3): 239-248.

            Advanced information technologies (ITs) have prompted many organizations to invest in distributed computing systems and to decentralize the management of information. However, today's organization requires effective information-exchange to bridge costly information gaps between different decision-makers or teams controlling isolated databases. Networking technologies and groupware applications have the potential to facilitate collaboration, but cannot guarantee information sharing. It is unrealistic to expect that technology alone can induce unwilling managers to part with privately held information. While an economic perspective would recommend contracts or transfer pricing as solutions to the problem, we suggest harnessing the power of organizational culture in promoting effective information flows across the organization, Using a game theoretic approach, we show how elements of organizational culture, involving the values of permanence, trust, teamwork and credibility, combined with appropriate reward systems and parity in IT capabilities, can help to achieve organizationally desirable information-exchange by aligning individual and organizational goals.

Barua, A. and B. Lee (1997). "The information technology productivity paradox revisited: A theoretical and empirical investigation in the manufacturing sector." International Journal of Flexible Manufacturing Systems 9(2): 145-166.

            The lack of empirical support for the positive economic impact of information technology (IT) has been called the IT productivity paradox. Even though output measurement problems have often been held responsible for the paradox, we conjecture that modeling limitations in production-economics-based studies and input measurement also might have contributed to the paucity of systematic evidence regarding the impact of IT, We take the position that output measurement is slightly less problematic in manufacturing than in the service sector and that there is sound a priori rationale to expect substantial productivity gains from IT investments in manufacturing and production management. We revisit the IT productivity paradox to highlight some potential limitations of earlier research and obtain empirical support for these conjectures. We apply a theoretical framework involving explicit modeling of a strategic business unit's (SBU)(1) input choices to a secondary data set in the manufacturing sector. A widely cited study by Loveman (1994) with the same dataset showed that the marginal contribution of IT to productivity was negative. However, our analysis reveals a significant positive impact of IT investment on SBU output. We show that Loveman's negative results can be attributed to the deflator used for the IT capital. Further, modeling issues such as a firm's choice of inputs like IT, non- IT, and labor lead to major differences in the IT productivity estimates. The question as to whether firms actually achieved economic benefits from IT investments in the past decade has been raised in the literature, and our results provide evidence of sizable productivity gains by large successful corporations in the manufacturing sector during the same time period.

Bashein, B. J., M. L. Markus, et al. (1994). "Preconditions For BPR Success - and How to Prevent Failures." Information Systems Management 11(2): 7-13.

            What organizational conditions set the stage for business process reengineering success or failure? Line managers and IS executives can assess their organizations against the positive and negative preconditions identified in this article.

Benbasat, I. and R. W. Zmud (1999). "Empirical research in information systems: The practice of relevance." Mis Quarterly 23(1): 3-16.

            This commentary discusses why most IS academic research today lacks relevance to practice and suggests tactics, procedures, and guidelines that the IS academic community might follow in their research efforts and articles to introduce relevance to practitioners. The commentary begins by defining what is meant by relevancy in the context of academic research. It then explains why there is a lack of attention to relevance within the IS scholarly literature. Next, actions that can be taken to make relevance a more central aspect of IS research and to communicate implications of IS research more effectively to IS professionals are suggested.

Bennett, M. and P. Weill (1997). "Exploring the use of electronic messaging infrastructure: The case of a telecommunications firm." Journal of Strategic Information Systems 6(1): 7-34.

Berndt, E. R. and C. J. Morrison (1995). "High-tech Capital Formation and Economic Performance in U.S. Manufacturing Industries: An Exploratory Analysis." Journal of Econometrics 65: 9-43.

Bharadwaj, A. S., S. G. Bharadwaj, et al. (1999). "Information technology effects on firm performance as measured by Tobin's q." Management Science 45(7): 1008-1024.

            Despite increasing anecdotal evidence that information technology (IT) assets contribute to firm performance and future growth potential of firms, the empirical results relating IT investments to firm performance measures have been equivocal. However, the bulk of the studies have relied exclusively on accounting-based measures of firm performance, which largely tend to ignore IT's contribution to performance dimensions such as strategic flexibility and intangible value. Ln this paper, we use Tobin's q, a financial market-based measure of firm performance and examine the association between IT investments and firm q values, after controlling for a variety of industry factors and firm-specific variables. The results based on data from 1988-1993 indicate that, in all of the five years, the inclusion of the IT expenditure variable in the model increased the variance explained in q significantly. The results also showed that, for all five years, IT investments had a significantly positive association with Tobin's q value. Our results are consistent with the notion that IT contributes to a firm's future performance potential, which a forward-looking measure such as the q is better able to capture.

Broadbent, M. and P. Weill (1993). "Improving Business and Information Strategy Alignment - Learning From the Banking Industry." Ibm Systems Journal 32(1): 162-179.

Broadbent, M. and P. Weill (1997). "Management by maxim: How business and IT managers can create IT infrastructures." Sloan Management Review 38(3): 77-92.

Broadbent, M., P. Weill, et al. (1999). "Strategic context and patterns of IT infrastructure capability." Journal of Strategic Information Systems 8(2): 157-187.

Broadbent, M., P. Weill, et al. (1999). "The implications of information technology infrastructure for business process redesign." Mis Quarterly 23(2): 159-182.

Brynjolfsson, E. (1993). "The Productivity Paradox of Information Technology." Communications of the Acm 36(12): 67-77.

Brynjolfsson, E. and L. Hitt (1993). Is Information Systems Spending Productive? New Evidence and New Results. Proceedings of the 14th International Conference on Information Systems, Orlando, FL.

Brynjolfsson, E. (1994). "Information Assets, Technology, and Organization." Management Science 40(12): 1645-1662.

            Although there is good reason to expect that the growth of information work and information technology will significantly affect the trade-offs inherent in different structures for organizing work, the theoretical basis for these changes remains poorly understood. This paper seeks to address this gap by analyzing the incentive effects of different ownership arrangement in the spirit of the Grossman-Hart-Moore (GHM) incomplete contracts theory of the firm. A key departure from earlier approaches is the inclusion of a role for an ''information asset,'' analogous to the GHM treatment of property. This approach highlights the organizational significance of information ownership and information technology. For instance, using this framework, one can determine when 1) informed workers are more likely to be owners than employees of firms, 2) increased flexibility of assets will facilitate decentralization, and 3) the need for centralized coordination will lead to centralized ownership. The framework developed sheds light on some of the empirical findings regarding the relationship between information technology and firm size and clarifies the relationship between coordination mechanisms and the optimal distribution of asset ownership. While many implications are still unexplored and untested, building on the incomplete contracts approach appears to be a promising avenue for the careful, methodical analysis of human organizations and the impact of new technologies.

Brynjolfsson, E., T. W. Malone, et al. (1994). "Does Information Technology Lead to Smaller Firms." Management Science 40(12): 1628-1644.

            Many changes in the organization of work in the United States since 1975 have been attributed to the increased capabilities and use of information technology (IT) in business. However, few studies have attempted to empirically examine these relationships. The primary goal of this paper is to assess the hypothesis that investments in information technology are at least partially responsible for one important organizational change, the shift of economic activity to smaller firms. We examine this hypothesis using industry-level data on IT capital and four measures of firm size, including employees and sales per firm. We find broad evidence that investment in IT is significantly associated with subsequent decreases in the average size of firms. We also find that these decreases in firm size are most pronounced two to three years after the IT investment is made.

Brynjolfsson, E. (1994). "Technology's True Payoff." InformationWeek(October 10): 34-36.

Brynjolfsson, E. and L. Hitt (1995). "Information Technology as a Factor of Production: the Role of Differences among Firm." Economics of Innovation and New Technology 3: 183-199.

Brynjolfsson, E. (1996). "The contribution of information technology to consumer welfare." Information Systems Research 7(3): 281-300.

            Over the past two decades, American businesses have invested heavily in information technology (IT) hardware. Managers often buy IT to enhance customer value in ways that are poorly measured by conventional output statistics. Furthermore, because of competition, firms may be unable to capture the full benefits of the value they create. This undermines researchers' attempts to determine IT value by estimating its contribution to industry productivity or to company profits and revenues. An alternative approach estimates the consumers' surplus from IT investments by integrating the area under the demand curve for IT. This methodology does not directly address the question of whether managers and consumers are purchasing the optimal quantity of II, but rather assumes their revealed willingness- to-pay for IT accurately reflects their valuations. Using data from the U.S. Bureau of Economic Analysis, we estimate four measures of consumers' surplus, including Marshallian surplus, Exact surplus based on compensated (Hicksian) demand curves, a ''nonparametric'' estimate, and a value based on the theory of index numbers. Interestingly, all four estimates indicate that in our base year of 1987, IT spending generated approximately $50 billion to $70 billion in net value in the United States and increased economic growth by about 0.3% per year. According to our estimates, which are likely to be conservative, IT investments generate approximately three times their cost in value for consumers.

Brynjolfsson, E. and L. Hitt (1996). "Paradox lost? Firm-level evidence on the returns to information systems spending." Management Science 42(4): 541-558.

            The ''productivity paradox'' of information systems (IS) is that, despite enormous improvements in the underlying technology, the benefits of IS spending have not been found in aggregate output statistics. One explanation is that IS spending may lead to increases in product quality or variety which tend to be overlooked in the aggregate statistics, even if they increase output at the firm-level. Furthermore, the restructuring and cost-cutting that are often necessary to realize the potential benefits of IS have only recently been undertaken in many firms. Our study uses new firm-level data on several components of IS spending for 1987-1991. The dataset includes 367 large firms which generated approximately 1.8 trillion dollars in output in 1992. We supplemented the IS data with data on other inputs, output, and price deflators from other sources. As a result, we could assess several econometric models of the contribution of IS to firm-level productivity. Our results indicate that IS spending has made a substantial and statistically significant contribution to firm output. We find that the gross marginal product (MP) for computer capital averaged 81% for the firms in our sample. We find that the MP for computer capital is at least as large as the marginal product of other types of capital investment and that, dollar for dollar, IS labor spending generates at least as much output as spending on non-IS labor and expenses. Because the models we applied were similar to those that have been previously used to assess the contribution of IS and other factors of production, we attribute the different results to the fact that our data set is more current and larger than others explored. We conclude that the productivity paradox disappeared by 1991, at least in our sample of firms.

Brynjolfsson, E. and S. Yang (1996). "Information Technology and Productivity: A Review of Literature." Advances in Computers 43: 179-214.

Brynjolfsson, E. and L. M. Hitt (1998). "Beyond the productivity paradox." Communications of the Acm 41(8): 49-55.

Byrd, T. A. and T. E. Marshall (1997). "Relating information technology investment to organizational performance: A causal model analysis." Omega-International Journal of Management Science 25(1): 43-56.

            Corporations have invested billions of dollars in information technology (IT) over the last 20 years. There is much debate regarding the benefits accruing from these expenditures. Direct linkage between technology investment and increases in organizational performance and productivity has been extremely elusive. This research investigates the relationship between IT investment and organizational performance so that managers may better evaluate IT expenditures. With data on IT investment and organizational performance from 350 public companies over 4 years, this study uses structural equation analysis to empirically test a theoretical model composed of five IT investment variables and five organizational performance variables. The study found that the variable used to measure the extent to which users have access to IT was significantly and positively related to sales by employee, an organizational measure of labor productivity. Two other IT investment variables, the value of supercomputers, mainframes, and minicomputers and the percentage of IT budget spent on IT staff, were significantly and negatively associated with the sales by employee measure. Another IT variable, the IT budget as a percentage of revenue, was significantly and negatively associated with sales by total assets, a traditional measure of capital productivity. The last IT variable, the percentage of IT budget spent on IT staff training, was not related to any performance variable. Implications of these findings are discussed and, from a management perspective, postulations relating IT investment to organizational performance are stated. Researchers are provided with suggestions and encouraged to use these results to probe deeper into the relationship between IT investment and organizational performance. (C) 1997 Elsevier Science Ltd.

Cabral, L. (1995). "Sunk Costs, Firm Size and Firm Growth." Journal of Industrial Economics 43(2): 161-172.

            For several decades, the conventional wisdom has been that expected firm growth rates are independent of firm size, a property known as Gibrat's Law. However, recent empirical work has found a negative relation between firm growth and firm size. This paper provides a theoretical explanation for this negative relation in a model of new firm growth where capacity and technology choices involve some degree of sunkness. Additional empirical implications of the theory of sunk costs are also developed. These relate to profit rates, Tobin's Q, exit rates, degree of sunkness of capacity costs, as well as size and growth rates.

Cameron, K. S. (1982). The effectiveness of ineffectiveness : a new approach to assessing patterns of organizational effectiveness. [Washington, DC. :, National Institute of Education,.

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Chou, T. C., R. G. Dyson, et al. (1998). "An empirical study of the impact of information technology intensity in strategic investment decisions." Technology Analysis & Strategic Management 10(3): 325-339.

            This paper focuses on two issues of the management of strategic information technology investment decisions (SITIDs). First, it examines the outcomes of strategic investment decisions (SIDs) according to the extent of IT intensity in the investment project (termed IT-ness). Second, IT-ness is assessed in relation to a number of dimensions, including decision formulating process, evaluation process and decision content. Empirical testing is based on a sample of 80 SIDs from Taiwanese enterprises. The results show that IT-ness is negatively associated with the effectiveness of SIDs and several constructs in the decision process. The implications of this for the evaluation and management of SITIDs, and an agenda for further research into the effectiveness of SITIDs, are discussed.

Chung, K. H. and S. W. Pruitt (1994). "A Simple Approximation of Tobins-Q." Financial Management 23(3): 70-74.

            This paper develops a simple formula for approximating Tobin's q. The formula requires only basic financial and accounting information. Results of a series of regressions comparing our approximate q values with those obtained via Lindenberg and Ross' (1981) more theoretically correct model indicate that at least 96.6% of the variability of Tobin's q is explained by approximate q.

DeLone, W. H. and E. R. McLean (1992). " Information Systems Success: In search of the independent variable." Information Systems Research 3(1): 60-95.

Devaraj, S. and R. Kohli (2000). "IT Payoff in the Healthcare Industry: A Longitudinal Study." Journal of Management Information Systems forthcoming.

Dewan, S. and C. K. Min (1997). "The substitution of information technology for other factors of production: A firm level analysis." Management Science 43(12): 1660-1675.

            Fueled by its constant technological and price improvements, information technology (IT) is displacing other inputs in the production of goods and services. By 1994, IT accounts for over 15% of fixed investments by the U.S. private sector, and the ratio of new IT investments to labor costs is approaching 5% (1990 dollar basis). The ability to take advantage of improvements in IT is determined in part by the substitutability of IT for other factors of production. This paper builds on the empirical framework of Brynjolfsson and Hitt (1995) and extends it to jointly estimate output and substitution elasticities using the CES-translog production function. Our primary source of IT-related data is the IDG/Computerworld annual survey data on IS spending by large U.S. firms, for the period 1988 to 1992, previously analyzed by Brynjolfsson and Hitt (1995, 1996) and Lichtenberg (1995). A key result is that IT capital is a net substitute for both ordinary capital and labor, suggesting that the factor share of IT in production will grow to more significant levels over time. We confirm earlier findings of positive returns to IT investment for this data set. Further, we find excess returns on IT investment relative to labor input and some evidence of excess returns relative to ordinary capital. Taken together, these results shed new light on the productivity paradox of IT and on the growth of information intensity across the economy as firms take advantage of the continuing improvements in IT.

Dewan, S., S. C. Michael, et al. (1998). "Firm characteristics and investments in information technology: Scale and scope effects." Information Systems Research 9(3): 219-232.

            This paper conducts an empirical analysis of the link between the scale and scope of the firm and information technology (IT) investments, emphasizing the role of IT in coordination and control. We extend the economic production function framework to include variables related to the boundaries of the firm, including related and unrelated diversification, vertical integration and growth options, and we estimate the resulting model on a data set based on annual surveys of IT spending by large U.S. firms, conducted by Computerworld during the period 1988-1992. Our results suggest that the level of IT investment is positively related to the degree of firm diversification, perhaps reflecting the greater need for coordination of assets within diversified firms. We further find that related diversification demands greater IT investment than unrelated diversification. Firms that are less vertically integrated have a higher level of IT investment. Finally, firms with fewer growth options in their investment opportunity set tend to have a higher IT investment, consistent with an agency perspective which predicts excessive IT investment by managers with "free" cash flow. Put together, these empirical relations between IT investments and firm characteristics help us better understand the role of IT in coordination and control and the choices firms make in information systems and strategy.

Dewan, S. and K. L. Kraemer (1998). "International dimensions of the productivity paradox." Communications of the Acm 41(8): 56-62.

Diewert, W. E. and A. M. Smith (1994). Productivity measurement for a distribution firm. Cambridge, MA :, National Bureau of Economic Research,.

Dudley, L. and P. Lasserre (1989). "Information as a Substitute for Inventories." European Economic Review 31: 1-21.

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Francalanci, C. and H. Galal (1998). "Information technology and worker composition: Determinants of productivity in the life insurance industry." MIS Quarterly 22(2): 227-241.

            This paper investigates the impact of IT investments and worker composition on the productivity of life insurance companies. The majority of previous IT productivity studies follow a technological imperative, hypothesizing a direct relationship between higher IT investments and increased productivity. This paper shifts the focus toward the organizational imperative, which views returns on IT investments as a result of the alignment between technology and other critical management choices. Specifically, the study focuses on the alignment between IT investments and worker composition, measured in terms of relative numbers of clerical, managerial, and professional positions to the total number of employees. Hypotheses are tested using a data set compiled over a 10-year period for 52 life insurance companies. With respect to prior research, the study is novel in its adoption of a model of productivity that accounts for both separate and combined effects of IT investments and worker composition. Premium income per employee and total operating expense to premium income are used as indicators of productivity. Study findings show that increases in IT expenses are associated with productivity benefits when accompanied by changes in worker composition. Life insurance companies that have decreased their proportion of clericals and professionals while at the same time investing in IT have experienced productivity improvements. On the other hand, companies decreasing their proportion of managers while investing in IT are found to have reduced productivity.

Gapenski, L. C. (1990). "Using Monte-Carlo Simulation to Make Better Capital-Investment Decisions." Hospital & Health Services Administration 35(2): 207-219.

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Grover, V., J. Teng, et al. (1998). "The influence of information technology diffusion and business process change on perceived productivity: The IS executive's perspective." Information & Management 34(3): 141-159.

Hair, J. F. (1998). Multivariate data analysis. Upper Saddle River, N.J., Prentice Hall.

Harker, P. T. (1995). The service productivity and quality challenge. Dordrecht ; Boston :, Kluwer Academic Publishers,.

Harris, S. E. and J. L. Katz (1991). "Organizational performance and IT investment intensity in the insurance." Organization Science 2(3): 263-295.

Hendricks, K. and V. Singhal (1997). "Does Implementing an Effective TQM Program Actually Improve Operating Performance?  Empirical Evidence from Firms That Have Won Quality Awards." Management Science 43(9): 1258-1274.

Hitt, L. M. and E. Brynjolfsson (1996). "Productivity, business profitability, and consumer surplus: Three different measures of information technology value." Mis Quarterly 20(2): 121-142.

            The business value of information technology (IT) has been debated for a number of years. While some authors have attributed large productivity improvements and substantial consumer benefits to IT, others report that IT has not had any bottom line impact on business profitability. This paper focuses on the fact that while productivity, consumer value, and business profitability are related they are ultimately separate questions. Accordingly, the empirical results on IT value depend heavily on which question is being addressed and what data are being used. Applying methods based on economic theory, we are able to define and examine the relevant hypotheses for each of these three questions, using recent firm-level data on IT spending by 370 large firms. Our findings indicate that IT has increased productivity and created substantial value for consumers. However, we do not find evidence that these benefits have resulted in supranormal business profitability. We conclude that while modeling techniques need to be improved, these results are collectively consistent with economic theory. Thus, there is no inherent contradiction between increased productivity, increased consumer value, and unchanged business profitability.

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Kelley, M. R. (1994). "Productivity and Information Technology - the Elusive Connection." Management Science 40(11): 1406-1425.

            This study analyzes the effect of information technology on the efficiency of production operations in a specific manufacturing process. Survey data from 584 establishments engaged in the machining process in 21 different industries are used to construct and test an empirical model that takes into account product characteristics, the type of technology (computer- programmable automation or conventionally controlled) machines, the extent of technological change at the plant, process- specific characteristics such as the scale of operations and degree of customization, labor policies, and structural features of the organization of work. The results indicate that there is a significant efficiency advantage from using programmable automation technology and that technological advantages accumulate with experience and with the repeated opportunities for learning associated with large volume and frequent product changes. The most efficient use of this technology occurs in plants with work practices that involve a higher ratio of machines to workers (as in a cellular approach to manufacturing) and allow production workers to perform programming tasks to a greater degree. Unionized plants are also significantly more efficient than non-union plants.

Kerlinger, F. N. (1964). Foundations of Behavioral Research. New York, Holt, Rinehart, and Winston.

Koenig, M. E. D. and T. D. Wilson (1996). "Productivity growth: The take-off point." Information Processing & Management 32(2): 247-254.

            Two major and apparently contradictory themes have emerged and taken center stage in the management literature in the last several years-the ''productivity paradox'' and ''business process reengineering.'' These apparently contradictory themes are in fact logically related to each other, and the theme of this piece is that we are on the cusp of emerging from the former to the latter.

Kohli, R., J. K. Tan, et al. (1999). "Integrating cost information with health management support system: an enhanced methodology to assess health care quality drivers." Top Health Inf Manage 20(1): 80-95.

            Changes in health care delivery, reimbursement schemes, and organizational structure have required health organizations to manage the costs of providing patient care while maintaining high levels of clinical and patient satisfaction outcomes. Today, cost information, clinical outcomes, and patient satisfaction results must become more fully integrated if strategic competitiveness and benefits are to be realized in health management decision making, especially in multi- entity organizational settings. Unfortunately, traditional administrative and financial systems are not well equipped to cater to such information needs. This article presents a framework for the acquisition, generation, analysis, and reporting of cost information with clinical outcomes and patient satisfaction in the context of evolving health management and decision-support system technology. More specifically, the article focuses on an enhanced costing methodology for determining and producing improved, integrated cost-outcomes information. Implementation issues and areas for future research in cost-information management and decision-support domains are also discussed.

Koski, H. (1999). "The implications of network use, production network externalities and public networking programmes for firm's productivity." Research Policy 28(4): 423-439.

            Empirical study reported in this paper explores the impacts of a firm's own use of network technologies, the other firms' use of compatible technologies and the firm's participation in the industry-level networking programme on its productivity. Empirical analysis of a database from among the firms in the Finnish electrical and electronics industry suggests a clear presence of production network externalities in the production function of the firms. We do not find support for the expected positive relationship between the firm's own use of advanced communications technologies and its output and productivity. The firm's participation in the industry-specific networking programme instead seems to give it some strategic advantage in terms of higher productivity compared to the other firms. It seems that in order to obtain non-negligible gains from new communications technologies, mere learning-by-using may not be sufficient; a firm has to actively facilitate learning and promote strategic use of communications technologies. Our estimation results suggest that this goal of public diffusion support programmes might be reached by industry-specific network programmes that support the introduction and strategic use of new network technologies in the firms. (C) 1999 Elsevier Science B.V. All rights reserved.

Kraemer, K. and J. Dedrick (1994). "Payoffs from investment in information technology - lessons from the Asia-pacific region." World Development 22(12): 1921-1931.

Kwon, M. J. and P. Stoneman (1995). "The Impact of Technology Adoption on Firm Productivity." Economics of Innovation and New Technology 3: 219-233.

Lang, L. H. P. and R. M. Stulz (1994). "Tobin Q, Corporate Diversification, and Firm Performance." Journal of Political Economy 102(6): 1248-1280.

            In this paper, we show that Tobin's q and firm diversification are negatively related throughout the 1980s. This negative relation holds for different diversification measures and when we control for other known determinants of q. Further, diversified firms have lower q's than comparable portfolios of pure-play firms. Firms that choose to diversify are poor performers relative to firms that do not, but there is only weak evidence that they have lower q's than the average firm in their industry. We find no evidence supportive of the view that diversification provides firms with a valuable intangible asset.

Lang, L., E. Ofek, et al. (1996). "Leverage, investment, and firm growth." Journal of Financial Economics 40(1): 3-29.

            We show that there is a negative relation between leverage and future growth at the firm level and, for diversified firms, at the business segment level. This negative relation between leverage and growth holds for firms with low Tobin's q ratio, but not for high-q firms or firms in high-q industries. Therefore, leverage does not reduce growth for firms known to have good investment opportunities, but is negatively related to growth for firms whose growth opportunities are either not recognized by the capital markets or are not sufficiently valuable to overcome the effects of their debt overhang.

LanglandOrban, B., L. C. Gapenski, et al. (1996). "Differences in characteristics of hospitals with sustained high and sustained low profitability." Hospital & Health Services Administration 41(3): 385-399.

Lee, B., A. Barua, et al. (1997). "Discovery and representation of causal relationships in MIS research: A methodological framework." Mis Quarterly 21(1): 109-136.

            The lack of theories and methodological weakness have been pointed out as two distinct but related problems in empirical management information systems (MIS) research. Reinforcing the existing belief that too much attention has been devoted to ''what'' as opposed to ''why'' or ''when'' relationships exist, this paper focuses on a subset of model building and methodology issues involving the systematic discovery and representation of causal relationships. Our analysis of the existing empirical MIS literature reveals the need to build richer causal models, to increase the flexibility of model representation, to integrate the isolated worlds of pure latent and pure manifested variables, and to provide a fighter linkage between the exploratory and confirmatory research phases. Based on philosophy of science and advances in the fields of experimental economics and sociology, we propose a foundation for developing richer models by explicitly considering the exogeneity and endogeneity of constructs and a manipulative account of causality, and by recognizing the role of incentives, agent, and organizational characteristics in MIS models. Since richer models require more flexible tools and techniques, the paper describes the representational shortcomings and statistical pitfalls of factor-analytic methods commonly deployed in empirical research. We suggest that weak exploratory phase tools and approaches may allow violations of causal assumptions to pass undetected to the confirmatory phase. Since confirmatory tools like LISREL also make factor-analytic assumptions, these violations are not likely to be detected at the confirmatory phase either. We propose using TETRAD, a non-parametric tool, at the exploratory phase for its ability to accommodate a wide variety of causal models. The findings are summarized within an integrated framework, which enhances the likelihood of discovering relationships through richer theoretical support and powerful exploratory analysis.

Lee, B. and A. Barua (1999). "An integrated assessment of productivity and efficiency impacts of information technology investments: Old data, new analysis and evidence." Journal of Productivity Analysis 12(1): 21-43.

            We reexamine the ``Information Technology (IT) productivity paradox'' from the standpoints of theoretical basis, measurement issues and potential inefficiency in IT management. Two key objectives are: (i) to develop an integrated microeconomic framework for IT productivity and efficiency assessment using developments in production economics, and (ii) to apply the framework to a dataset used in prior research with mixed results to obtain new evidence regarding IT contribution. Using a stochastic frontier with a production economics framework involving the behavioral assumptions of profit maximization and cost minimization, we obtain a unified basis to assess both productivity and efficiency impacts of IT investments. The integrated framework is applied to a manufacturing database spanning 1978-1984. While previous productivity research with this dataset found mixed results regarding the contribution from IT capital, we show the negative marginal contribution of IT found in an important prior study is attributable primarily to the choices of the IT deflator and modeling technique. Further, by ignoring the potential inefficiency in IT investment and management, studies that have reported positive results may have significantly underestimated the true contribution of IT. This positive impact of IT is consistent across multiple model specifications, estimation techniques and capitalization methods. The stochastic production frontier analysis shows that while there were significant technical, allocative and scale inefficiencies, the inefficiencies reduced with an increase in the IT intensity. Given that the organizational units in our sample increased their IT intensity during the time period covered by the study, management was taking a step in the right direction by increasing the IT share of capital inputs. Our results add to a small body of MIS literature which reports significant positive returns from IT investments.

Lee, H. G., T. Clark, et al. (1999). "Research report. Can EDI benefit adopters?" Information Systems Research 10(2): 186-195.

Lehr, W. and F. R. Lichtenberg (1998). "Computer use and productivity growth in US federal government agencies, 1987-92." Journal of Industrial Economics 46(2): 257-279.

            We examine the impact of information technology (IT) on productivity in the public sector econometrically, using data from the BLS Federal Productivity Measurement Program and from Computer Intelligence Infocorp, and by interviewing some government officials. We estimate a production function for government services that includes IT capital as an input, and find a strong positive relationship across federal agencies between productivity growth and computer-intensity growth during the period 1987-92, controlling for growth in compensation and other outlays per employee, and in the number of employees. Our estimates are consistent with the hypothesis that there are 'excess returns' to IT capital.

Li, M. F. and L. R. Ye (1999). "Information technology and firm performance: Linking with environmental, strategic and managerial contexts." Information & Management 35(1): 43-51.

            The performance impact of information technology (IT) investment is an important research topic that needs to take into consideration the role of key contextual factors. This study discussed and empirically tested the moderating effects of environmental dynamism, firm strategy, and CEO/CIO arrangement on the: impact of IT investment on firm performance. The study sample consisted of major US corporations. The empirical results, based on a moderated regression modeling approach, provided preliminary evidence supportive of the hypotheses advanced in this paper. Specifically, IT investment appears to have a stronger positive impact on financial performance when there are greater environmental changes, more proactive company strategy, and closer CEO/CIO ties. According to our findings, companies considering IT investment should assess their environmental contexts, strategic directions, and top management team arrangement to allow CIO's a more strategic role. (C) 1999 Elsevier Science B.V. All rights reserved.

Lichtenberg, F. R. (1995). "The Output Contributions of Computer Equipment and Personal: A Firm-Level Analysis." Economics of Innovation and New Technology 3: 201-217.

Loveman, G. W., Ed. (1994). An Assessment of the Productivity Impact of the Information Technologies. Information Technology and The Corporation of the 1990's: Research Studies. New York, Oxford University Press.

Lubbe, S., G. Parker, et al. (1995). "The Profit Impact of IT Investment." Journal of Information Technology 10: 44-51.

Mahmood, M. A. and S. K. Soon (1991). "A Comprehensive Model For Measuring the Potential Impact of Information Technology On Organizational Strategic Variables." Decision Sciences 22(4): 869-897.

Mahmood, M. and G. M. Mann (1993). "Measuring the Organizational Impact of Information Technology Investment: An Exploratory Study." Journal of Management Information Systems 10(1): 97-122.

Mahmood, M. A., K. J. Pettingell, et al. (1996). "Measuring productivity of software projects: A data envelopment analysis approach." Decision Sciences 27(1): 57-80.

            Current economic conditions are forcing information system departments to focus simultaneously on decreasing costs while increasing software productivity. Improving software productivity is becoming critical because software costs of large in-house software companies have been increasing rapidly. For many organizations, however, measuring software productivity has been a difficult task. Using Data Envelopment Analysis (DEA), this research study investigates the productivity of 78 commercial system projects. The results of this study have practical implications for software project managers undertaking software development. The results showed that the DEA technology can be successfully used to identify efficient and inefficient software projects. Furthermore, within the inefficient group, DEA can also identify factors that affect software productivity in a positive or negative manner, allowing managers to take corrective actions. Based on the findings of this study, the manuscript also provides some practical guidelines for managers to follow in software development.

Mahmood, M. and G. J. Mann (1997). How Information Technology Investments Affect Organizational Productivity and Performance: A Longitudinal Study. Proceedings of the 1997 Information Resources Management Association International Conference,.

Markus, M. L. and D. Robey (1988). "Information Technology and Organizational-Change - Causal- Structure in Theory and Research." Management Science 34(5): 583-598.

Markus, M. L. and C. Tanis (1999). The Enterprise Systems Experience - From Adoption to Success. Framing the Domains of IT research: Glimpsing the Future Through the Past. R. W. Zmud. Cincinnati, OH, Pinnaflex Educational Resources.

Menon, N. M., B. Lee, et al. (2000). "Productivity of Information Systems in the Healthcare Industry." Information Systems Research Forthcoming.

Menon, N. M. and B. Lee (Forthcoming). "Cost control and production performance enhancement by IT investment and regulation changes: evidence from Washington State healthcare service industry." Decision Support Systems.

Milgrom, P. and J. Roberts (1988). "Communication and Inventory As Substitutes in Organizing Production." Scandinavian Journal of Economics 90(3): 275-289.

Milgrom, P. and J. Roberts (1988). "Economic-Theories of the Firm - Past, Present, and Future." Canadian Journal of Economics-Revue Canadienne D Economique 21(3): 444-458.

Milgrom, P. and J. Roberts (1988). "An Economic-Approach to Influence Activities in Organizations." American Journal of Sociology 94: S154-S179.

Mooney, J. G., V. Gurbaxani, et al. (1996). "A process oriented framework for assessing the business value of information technology (Reprinted from Proceedings of the sixteenth annual International Conference on Information Systems, pg 17-27, 1995)." Data Base For Advances in Information Systems 27(2): 68-81.

            In the current competitive environment, the need for better management of all organizational resources, and specifically IT, requires comprehensive assessment of their contribution to firm performance. However, there is little empirical evidence that IT is capable of creating value, nor has a comprehensive framework of business value emerged. Many of the available studies of IT productivity and business value were conducted using firm level output measures of value. The focus on firm level output variables, while important provides only limited understanding of how value is created using IT. This paper develops a conceptual framework of the business value outcomes of IT by synthesizing the extant literature on IT business value and IT supported organization and process design. The framework provides a basis for process oriented studies of IT business value, and enhances our understanding of the links between information technology and firm performance.

Mooney, J., V. Gurbaxani, et al. (1996). " A Process Oriented Framework for Assessing the Business Value of Information Technology." Database Advances in Information Systems 27(2): 68-8.

Morrison, C. and E. Berndt (1991). Assessing the Productivity of Information Technology Equipment in U.S. Manufacturing Industries, National Bureau of Economic Research Working Paper.

Morrison, C. J. (1997). "            Assessing the productivity of information technology equipment in US manufacturing industries." The Review of Economics and Statistics: 471-481.

Mukhopadhyay, T. and R. B. Cooper (1992). "Impact of Management-Information-Systems On Decisions." Omega-International Journal of Management Science 20(1): 37-49.

            The effectiveness of management information systems (MIS) depends upon their impact on the quality of managerial decision making. This paper explores this impact from a microeconomic production perspective, with MIS as an input to a management decision production function. Using inventory control decisions as an example, analytical and simulation evidence is provided that the production perspective is reasonable. In addition, benefits of this perspective in describing the effect of MIS on decision making and in providing guidance for appropriate MIS investment are illustrated.

Mukhopadhyay, T., A. Barua, et al. (1995). "Information Technologies and Business Value - an Analytic and Empirical-Investigation." Information Systems Research 6(2): U2-U2.

Mukhopadhyay, T., S. Kekre, et al. (1995). "Business Value of Information Technology - a Study of Electronic Data Interchange." MIS Quarterly 19(2): 137-156.

            A great deal of controversy exists about the impact of information technology on firm performance. While some authors have reported positive impacts, others have found negative or no impacts. This study focuses on Electronic Data Interchange (EDI) technology. Many of the problems in this line of research are overcome in this study by conducting a careful analysis of the performance data of the past decade gathered from the assembly centers of Chrysler Corporation. This study estimates the dollar benefits of improved information exchanges between Chrysler and its suppliers that result from using EDI. After controlling for variations in operational complexity arising from mix, volume, parts complexity, model, and engineering changes, the savings per vehicle that result from improved information exchanges are estimated to be about $60. Including the additional savings from electronic document preparation and transmission, the total benefits of EDI per vehicle amount to over $100. System wide, this translates to annual savings of $220 million for the company.

Mukhopadhyay, T., S. Rajiv, et al. (1997). "Information technology impact on process output and quality." Management Science 43(12): 1645-1659.

            Our work represents one of the first attempts to assess the impact of IT (information technology) on both process output and quality. We examine the optical character recognition and barcode sorting technologies in the mail sorting process at the United States Postal Service. Our analysis is at the application level, and thus does not involve the aggregation of IT impact over multiple processes. We use data from 46 mail processing centers over 3 years to study the IT impact. We also use a set of factors in our model to account for differences in input characteristics. Our results show that mail sorting output significantly increases with higher use of IT. In addition, IT improves quality which in turn enhances output. We also find that input characteristics exert considerable influence in determining the output and quality of the mail sorting operation. For example, while absenteeism tends to decrease output and quality due to its disruptive consequences, a higher fraction of barcoded mail seems to enhance both performance measures.

Mukhopadhyay, T., F. J. Lerch, et al. (1997). "Assessing the Impact of Information Technology on Labor Productivity: A Field Study." Decision Support Systems 19(2): 109-122.

Myers, B., L. Kappelman, et al. (1997). A comprehensive model for assessing the quality and productivity of the information system function: Toward a contingency theory for information systems assessment,, University of North Texas.

Nadiminti, R., T. Mukhopadhyay, et al. (1996). "Risk aversion and the value of information." Decision Support Systems 16(3): 241-254.

            Determining the value of information is a fundamental research problem for information system scientists. Unfortunately, very little research exists that examines the relationship between risk aversion and the value of information. This is surprising because empirical studies show that most managers are risk averse rather than risk neutral. Moreover, the small literature that exists appears to be in conflict. We have developed a framework to examine the relationship between the value of information and risk aversion. We show that the method of payment for information must be considered in determining this relationship. We have used the Arrow-Pratt measure of risk aversion to derive explicit conditions under which the value of information increases (decreases) with risk aversion. From our analysis it is clear that earlier work has depicted a limited view of the relationship between risk aversion and value of information. Our analysis is applicable to the ex-post evaluation of transaction processing systems and a subset of decision and expert support systems.

Nault, B. and I. Benbasat (1990). "An Evaluation of Empirical Research in Managerial Support Systems." Decision Support Systems 6: 203-226.

Noh, J. and J. A. Fitzsimmons (1999). "Effect of information technology on marketing performance of Korean service firms." International Journal of Service Industry Management 10(3): 307-319.

            A study of Korean service firms found that the level of information technology use is significantly related to the performance of the marketing function. Support was lacking only for the categories of "use of outside database" and "networking between mainframe computer and PCs." In addition, the form of information technology use is significant in its contribution to the performance of the marketing function. This study supports the argument that benefits of information technology investment can be identified. Furthermore, there is evidence of a time lag in the payoffs from information technology, because the benefits of connectivity have not yet been realized.

Papp, R. (1999). "Business-IT alignment: productivity paradox payoff?" Industrial Management & Data Systems 99(7-8): 367-373.

            Strategic alignment remains a key area of focus among business executives. Methods exist with which to determine the type of alignment a firm is following and there has even been research into the factors which aid and hinder the achievement of alignment. What is currently lacking is a financial performance metric with which a firm can benchmark itself against its competition controlling for industry classification or similar alignment perspective. This paper explores the financial performance and alignment of over 500 firms over the past five years. From these data, a regression equation to measure performance controlling for alignment perspective and industry classification is proposed. Such an equation provides firms with an idea of where they stand, on average, within their respective industry and among firms following the same alignment perspective. Implications for managers are also discussed as well as general strategies for managers to facilitate and enhance information technology investment.

Peffers, K. e. and B. L. Dos Sontos (1996). "            Performance effects of innovative IT applications over time." IEEE Transactions on Engineering Management 43(4): 381-392.

Pinsonneault, A. and K. L. Kraemer (1997). "Middle management downsizing: An empirical investigation of the impact of information technology." Management Science 43(5): 659-679.

            Nearly all Fortune 1000 firms claim to have downsized since the early eighties, and it is argued that information technology (IT) is responsible for this massive downsizing. However, earlier research has indicated that IT increases middle management. Even though the impact of IT on the middle management workforce has been studied for the last thirty years, research has failed to clearly explain this phenomenon. Quite the opposite, research has fueled controversy and has provided inconsistent findings. This article addresses the state of inconsistent findings across multiple studies by examining the impact of information technology on the number of middle managers using two additional variables: the degree of centralization of organizational decision authority and the degree of centralization of computing decision authority. One hundred and fifty-five city governments were surveyed. Information technology was found to be both positively and negatively associated with the size of the middle management workforce. The impact of information technology was fundamentally determined by who controlled computing decisions and what interests were being served, and by the roles of middle managers. Information technology was associated with a decrease in the size of the middle management workforce in organizations with centralized decision authority and with an increase in the number of middle managers in organizations where decision authority was decentralized.

Pinsonneault, A. and S. Rivard (1998). "Information technology and the nature of managerial work: From the productivity paradox to the Icarus paradox?" MIS Quarterly 22(3): 287-311.

Powell, P. (1992). "Information Technology Evaluation - Is It Different." Journal of the Operational Research Society 43(1): 29-42.

            All investment decisions are problematic. The IT community seems to shy away from evaluation of its investments. This paper examines information technology investment in order to assess if it is radically different from other investment decisions. The lack of formal evaluation of IT projects may be due, not to a deficiency in the tools available to the evaluator, but to other factors. These factors are appraised and possible ways forward considered.

Powell, T. C. and A. DentMicallef (1997). "Information technology as competitive advantage: The role of human, business, and technology resources." Strategic Management Journal 18(5): 375-405.

            This paper investigates linkages between information technology (IT) and firm performance. Although showing recent signs of advance, the existing IT literature still relies heavily on case studies, anecdotes, and consultants' frameworks, with little solid empirical work or synthesis of findings. This paper examines the IT literature, develops an integrative, resource-based theoretical framework, and presents results from a new empirical study in the retail industry. The findings show that ITs alone have not produced sustainable performance advantages in the retail industry, but that some firms have gained advantages by using ITs to leverage intangible, complementary human and business resources such as flexible culture, strategic planning-IT integration,and supplier relationships. The results support the resource-based approach, and help to explain why some firms outperform others using the same ITs, and why successful IT users often fail to sustain IT- based competitive advantages. (C) 1997 by John Wiley & Sons, Ltd.

Prasad, B. and P. Harker (1997). Examining the Contribution of Information Technology toward Productivity and Profitability in U.S. Retail Banking, Financial Institutions Center, The Wharton School.

Prattipati, S. N. and M. O. Mensah (1997). "Information systems variables and management productivity." Information & Management 33(1): 33-43.

Quinn, R. E. and K. S. Cameron (1988). Paradox and transformation : toward a theory of change in organization and management. Cambridge, Mass. :, Ballinger Pub. Co.,.

Quinn, J. B. (1996). "The productivity paradox is false: Information technology improves services performance." Advances in Services Marketing and Management 5: 71-84.

            This article draws on government and industry data, as well as a National Research Council study, to provide evidence that same experts' belief that ''services productivity is lagging'' is false. First, the article reviews why services productivity is understated in government databases. Second, several alternative reasons that managers invest in information technology (IT) that do not show up in ''productivity'' data are considered. Finally, the unrealistic assumption that the benefits of IT expenditures should be immediately evident in financial measures such as profits, ROI or sales per employee is examined. The article concludes with a discussion of several notable areas in need of improvement with regard to IT implementation identified by the National Research Council study.

Rai, A., R. Patnayakuni, et al. (1996). "Refocusing where and how IT value is realized: An empirical investigation." Omega-International Journal of Management Science 24(4): 399-412.

            This study examines the direct and interaction effects of IT investments and IS department efficiency on different facets of firm performance. Specifically, measures for financial, sales, and intermediate firm performance are considered. IS budget is used as a measure of IT investment; asset turnover and labor productivity are used as intermediate performance measures; and sales per IS employee and income pr IS employee are used as measures of IS department efficiency. Secondary sources were used to construct a database of 210 firms, which was used for statistical analysis. Our results suggest that; (i) IS budget is not related to financial firm performance, but is positively related to sales performance; (ii) The results for intermediate performance were mixed; (iii) IS efficiency had no impact on the relationship between IS budget and firm performance measures, except market share. Analysis of the results suggest that the effect of LT investments should be assessed simultaneously on both aggregate and intermediate performance. Furthermore, IS departments with ''high'' efficiency may be unable to better leverage each additional dollar spent on IT. This has significant implications for organizations considering radical downsizing and elimination of their IS departments, as in the process they could reduce their conversion effectiveness. Copyright (C) 1996 Elsevier Science Ltd

Rai, A. and R. Patnayakuni (1997). "Technology investment and business performance." Communications of the ACM 40(7): 89-97.

            Examines the relationship between measures of information technology (IT) investment and facets of corporate business performance. Method used to measure the business value of IT investment; Inclusion of three measures of IT investment in the study; Highlights from previous studies that examined the value of IT investment

Rao, H. R., C. C. Pegels, et al. (1995). "The Impact of Edi Implementation Commitment and Implementation Success On Competitive Advantage and Firm Performance." Information Systems Journal 5(3): 185-202.

            Electronic Data Interchange Systems (EDI) are increasingly being used by business firms to improve operations and customer service. One of the major motivations for business organizations using EDI is to gain a strategic advantage in the marketplace. Although EDI has been implemented by many organizations, unfortunately not all have gained the same level of expected advantage or envisioned benefits. In this study we focus on the impact of EDI implementation commitment and implementation success on competitive advantage and firm performance. We study two categories of companies: companies that initiate the development of EDI and are known as hub companies and those that are their non-hub counterparts. Findings indicate that non-hub firms may not reap the same level of expected benefits resulting from EDI technology adoption and implementation as hub firms.

Roach, S. (1987). America's Technology Dilemma: A Profile of the Information Economy, Morgan Stanley.

Robey, D. and M. C. Boudreau (1999). "Accounting for the Contradictory Organizational Consequences of Information Technology: Theoretical Directions and Methodological Implications." Information Systems Research 10(2): 167-185.

Seddon, P. B. (1997). "A respecification and extension of the DeLone and McLean model of IS success." Information Systems Research 8(3): 240-253.

Seidmann, A. and A. Sundararajan (1997). "The effects of task and information asymmetry on business process redesign." International Journal of Production Economics 50(2-3): 117-128.

            The effective design of business processes is a subject of considerable importance to corporations today. Our research develops a theoretical framework for process design that is aimed at providing practical guidelines for process managers. The abundance of context-specific case studies which exist today share many success stories but provide little in terms of a general methodological approach. In this paper, we describe our general framework for the analysis and design of business processes. We outline a typical business process and critically evaluate typical pre- and post-reengineering process design issues. Explicit aspects of our analysis address workflow design, task bundling, technological enablers, and performance- based incentives. We examine the effects of task size asymmetry and performance information asymmetry on the optimal process design. Our results indicate that, with increased asymmetry, certain types of process designs become more desirable. Furthermore, we look at the interaction between job asymmetry and other process design factors such as knowledge intensity and level of job customization. Finally, we show when asymmetry can cause process reengineering efforts to complement the classic performance-based incentive compensation model. Practical implications of our results are illustrated for a variety of process design cases.

Sethi, V. and W. R. King (1994). "Development of Measures to Assess the Extent to Which an Information Technology Application Provides Competitive Advantage." Management Science 40(12): 1601-1627.

            In order to measure the extent to which information technology provides competitive advantage, the construct ''Competitive Advantage Provided by an Information Technology Application'' (CAPITA) was operationalized. A field survey gathered data from 185 top information systems executives regarding information technology applications which had been developed to gain competitive advantage. A confirmatory analysis revealed that CAPITA may be conceptualized in terms of nine dimensions which satisfy key measurement criteria including unidimensionality and convergent validity, discriminant validity, predictive validity, and reliability. The nine dimensions form the basis of a preliminary multidimensional measure or index of competitive advantage which has practical uses for competitive assessment. These include justifying and evaluating applications and acting as dependent variables in empirical competitive advantage research. Extensions entail formulating alternative measures of CAPITA to clarify the theoretical foundations of the construct, validating the latent-structure model on another data set, use of multiple informants for data collection, and exploring complex factor structures for the construct.

Siegel, D. and Z. Griliches (1992). Purchased Services, Outsourcing, Computers, and Productivity in Manufacturing. Output Measurement in the Service Sectors. G. e. al., University of Chicago Press.

Siegel, D. (1997). "The Impact of Computers on Manufacturing Productivity Growth: A Multiple-Indicators, Multiple-Causes Approach." The Review of Economics and Statistics: 68-78.

Sircar, S., J. Turnbow, et al. (1998). "The Impact of Information Technology Investments on Firm Performance: A Review of Literature." Engineering Valuation and Cost Analysis 1: 171-181.

Smith, H. A. and J. D. McKeen (1993). "How Does Information Technology Affect Business Value - a Reassessment and Research Propositions." Revue Canadienne Des Sciences De L Administration-Canadian Journal of Administrative Sciences 10(3): 229-240.

            Because of the tremendous growth in the investment in information technology (IT), senior management has begun to demand that the value of this investment be assessed. This assessment is not possible without measurement. As a result, many feel that the measurement of IT value will be the critical management task of the next decade. The purpose of this paper is threefold First, it reviews current research on the value,of IT with the hope of understanding the reason for the equivocal results which have been obtained It does this by examining the assumptions and measures which have been used in framing this research. Second, it looks at how organizational performance is measured and how performance is presumed to be affected by information technology. Finally, it explores a new set of assumptions, measures, and research propositions which may yield more fruitful results in assessing the value of information technology. While the paper is theoretical, it develops the groundwork for future empirical studies by establishing the necessary quantitative measures for such investigation.

Soh, C. and M. Markus (1995). How IT Creates Business Value: A Process Theory Synthesis. Proceedings of the Sixteenth International Conference on Information Systems,, Amsterdam, The Netherlands.

Sohal, A. S. and L. Ng (1998). "The role and impact of information technology in Australian business." Journal of Information Technology 13(3): 201-217.

            This paper reports the results of a study of the top 530 organizations in Australia which was conducted to determine whether organizations use IT as a strategic tool to meet competitive issues. Significantly this research addressed the following questions: How well organizations matched their IT investment plans with their strategic planning; how well IT strategies were formulated; how well IT systems were implemented and what were the critical success factors and impediments; and whether organizations were truly getting value from their IT investment. The findings have shown the causes of misused IT in some organizations, such as IT strategy not closely aligned with business strategy, no change of historical IT structure, lack of understanding of the potential of IT, lack of CEO and senior management support and awareness of IT's potential, impediments to IT development and implementation. Although in many organizations the role of IT development has become proactive and strategic to gain competitive advantage through primary and support activities, it has still not unleashed ITs full potential.

Srinivasan, K., S. Kekre, et al. (1994). "Impact of Electronic Data Interchange Technology On Jit Shipments." Management Science 40(10): 1291-1304.

            We investigate the degree to which increasing vertical information integration using Electronic Data Interchange technology enhances shipment performance of suppliers in a Just-in-Time environment. Our analysis of shipment data in the automobile industry suggests that shipment performance degrades substantially due to increases in part variety and trading partners from diverse industries. However, investments in information technology to support both the sharing of JIT schedules and the establishment of integrated information links are related to significant reduction in the level of shipment discrepancies.

Stead, W. W. and N. M. Lorenzi (1999). "Health informatics: Linking investment to value." Journal of the American Medical Informatics Association 6(5): 341-348.

            Informatics and information technology do not appear to be valued by the health industry to the degree that they are in other industries. The agenda for health informatics should be presented so that value to the health system is linked directly to required investment. The agenda should acknowledge the foundation provided by the current health system and the role of financial issues, system impediments, policy, and knowledge in effecting change. The desired outcomes should be compelling, such as improved public health, improved quality as perceived by consumers, and lower costs. Strategies to achieve these outcomes should derive from the differentia of health, opportunities to leverage other efforts, and lessons from successes inside and outside the health industry. Examples might include using logistics to improve quality mass customization to adapt to individual values, and system thinking to change the game to one that can be won. The justification for the informatics infrastructure of a virtual health care data bank, a national health tare knowledge base, and a personal clinical health record flows naturally from these strategies.

Stoneman, P. and M. J. Kwon (1996). "Technology Adoption and Firm Profitability." The Economic Journal 106: 952-962.

Strassman, P. A. (1990). The Business Value of Computers, Information Economics Press.

Strassmann, P. A. (1985). Information payoff : the transformation of work in the electronic age. New York, London, Free Press; Collier Macmillan.

Tam, K. (1998). "Analysis of firm-level computer investments: A comparative study of three Pacific-Rim economies." IEEE Transactions On Engineering Management 45(3): 276-286.

Tam, K. Y. (1998). "The impact of information technology investments on firm performance and evaluation: Evidence from newly industrialized economies." Information Systems Research 9(1): 85-98.

Teo, T. and P. Wong (1998). "An empirical study of the performance impact of computerization in the retail industry." Omega-International Journal Of Management Science 26(5): 611-621.

Torkzadeh, G. and W. J. Doll (1999). "The development of a tool for measuring the perceived impact of information technology on work." Omega-International Journal of Management Science 27(3): 327-339.

            The impact of information technology on work life has been one of the most talked about issues over the recent years. Chief executive officers spending millions of dollars on information technology face the critical issue of assessing the impact of this technology on work. Information system managers are increasingly required to justify technology investment in terms of its impact on the individual and his/her work. Measures of impact of information technology have narrowly focused on productivity impacts. This study uses a broader concept that is based on the impact of technology on the nature of work literature. This literature recognizes the multiple impacts of technology on work at the level of the individual. A review of the literature enabled us to generate thirty-nine items that were grouped into four constructs. In a pilot study, these constructs were assessed by observers in structured interviews with eighty-nine users to provide a criterion measure. Next, the users completed the thirty-nine item questionnaire. The unidimensionality, internal consistency and criterion-related validity of each construct were assessed. The pilot results suggest a four factor la-item instrument that measures how extensively information technology applications impact task productivity, task innovation, customer satisfaction and management control. In a large scale study, a sample of 409 respondents was gathered to further explore this 12-item instrument and its relationships with other constructs (user involvement, user satisfaction, system usage). The results support the four factor model. Evidence of reliability and construct validity is presented for the hypothesized measurement model and future research is discussed. (C) 1999 Elsevier Science Ltd. All rights reserved.

Van Alstyne, M., E. Brynjolfsson, et al. (1995). "Why not one big database? Principles for data ownership." Decision Support Systems 15(4): 267-284.

            This research concerns incentive principles that drive information sharing and affect database value. Many real world centralization and standardization efforts have failed, typically because departments lacked incentives or needed greater local autonomy. Using an incomplete contracts approach from economics, the costs and benefits of restructuring organizational control, including critical intangible factors, are modeled by explicitly considering the role of data ownership. There are 2 principal contributions from the approach. First, it defines mathematically precise terms for analyzing the incentive costs and benefits of changing control. Second, this theoretical framework leads to the development of a concrete model and 7 normative principles for improved database management. These principles may be instrumental to designers in a variety of applications such as the decision to decentralize or to outsource information technology and they can be useful in determining the value of standards and translators. Applications of the proposed theory are also illustrated through case histories.

Van Asseldonk, M. (1988). "Effects of Information Technology on Dairy Farms in the Netherlands: An Empirical Analysis of Milk Production Records." Journal of Dairy Science 81(10): 2752-2759.

Van de Ven, A. H. and R. Drazin (1985). "The Concept of Fit in Contingency Theory." Research in Organizational Behavior 7: 333-365.

Van Dyke, T. P., L. A. Kappelman, et al. (1997). " Measuring Information Systems Service Quality: Concerns on the Use of the SERVQUAL Questionnaire." MIS Quarterly 21(2 (June)): 195-208.

            SERVQUAL is an instrument for assessing the quality of the services supplied by an information services

 provider. Some of the implications for measuring service quality in the information systems context are discussed. Findings

 indicate that SERVQUAL suffers from a number of conceptual and empirical difficulties. Conceptual difficulties include the

 operationalization of perceived service quality as a difference or gap score, the ambiguity of the expectations construct, and

 the unsuitability of using a single measure of service quality across different industries. Empirical problems, which may be

 linked to the use of difference scores, include reduced reliability, poor convergent validity, and poor predictive validity. This

 suggests that: 1. Some alternative to difference scores is preferable and should be utilized. 2. If used, caution should be

 exercised in the interpretation of IS-SERVQUAL difference scores. 3. Further work is needed in the development of

 measures for assessing the quality of IS services.

Wagner, J. A. (1994). "Participation's Effects on Performance and Satisfaction:  A reconsideration of research evidence." Academy of Management Journal 19(2): 312-330.

Wang, C. H., R. D. Gopal, et al. (1997). "Use of data envelopment analysis in assessing information technology impact on firm performance." Annals of Operations Research 73: 191-213.

            The purpose of this paper is to consider the effect of Information Technology on the performance of a firm. We use Data Envelopment Analysis (DEA) to study this problem. In the paper, we outline DEA and address its advantages over parametric approaches. We then develop a methodology to identify the efficiency of IT utilization and the importance of IT-related activities and their effect on firm performance, within the DEA framework. Our methodology also evaluates the marginal benefits of IT. We provide an application of our methodology through an illustration.

Ward, J., P. Taylor, et al. (1996). "Evaluation and realisation of IS/IT benefits: An empirical study of current practice." European Journal of Information Systems 4(4): 214-225.

            This paper presents the main findings of a 1994 survey of UK industry practices in the evaluation and realisation of IS/IT benefits ('benefits management'). The survey addresses the issues which affect the ability of organizations to realise the full benefits of IS/IT investments, i.e. not only the pre- investment appraisal and post-investment evaluation processes, but also how organizations do or do not ensure that benefits claimed are actively managed through to realisation. To do this a new benefits management process model was used to structure a questionnaire to elicit details of how effective organizations are in addressing benefits management throughout the investment lifecycle. Sixty organizations responded to the survey, thus providing a wealth of data for analysis. This paper presents some of the key results of that analysis. From the survey, it is clear that many organizations believe that current methods are far from satisfactory in ensuring that the benefits are properly identified and realised. Very few have a comprehensive process for managing the delivery of benefits from IS/IT. This paper offers new insight into the reasons for the current unsatisfactory situation and points the way to how the situation could be significantly improved.

Weill, P. and M. H. Olson (1989). "Managing Investment in Information Technology - Mini Case Examples and Implications." Mis Quarterly 13(1): 3-17.

Weill, P. (1990). "Strategic Investment in Information Technology - an Empirical- Study." Information Age 12(3): 141-147.

Weill, P. (1992). "The Relationship Between Investment in Information Technology and Firm Performance:  A Study of the Valve Manufacturing Sector." Information Systems Research 3(4): 307-333.

Willcocks, L. P. and S. Lester (1997). "In search of information technology productivity: Assessment issues." Journal of the Operational Research Society 48(11): 1082-1094.

            Despite the massive investments in Information Technology (IT) in the developed economies, the IT impact on productivity and business performance continues to be questioned. The paper critically reviews this 'IT productivity paradox' debate. It suggests that important elements in the,uncertainty about the IT payoff relate to deficiencies in measurement at the macroeconomic level, but also to weaknesses in organisational evaluation practice. The paper reports evidence from a 1996 UK survey pointing to such weaknesses. Focusing at the more meaningful organisational level, an integrated systems lifecycle approach is put forward as a long term way of strengthening evaluation practice. This incorporates a cultural change in evaluation from 'control through numbers' to a focus on quality improvement. The approach is compared against 1995- 96 research findings in a multinational insurance company, where senior managers in a newly created business division consciously sought related improvements in evaluation practice, and IT productivity.

Wilson, D. (1993). Assessing the Impact of Information Technology on Organizational Performance. Strategic Information Technology Management. R. Banker, R. Kauffman and M. A. Mahmood. Harrisburg, PA, Idea Group.

Wolf, F. M. (1986). Meta-Analysis: Quantitative Methods for Research Synthesis. Beverly Hills, CA, Sage Publications.

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