Information Technology and the Productivity Paradox Assessing the Value of Investing in IT

by Lucas, Henry C.

• ISBN13: 9780195121599
• ISBN10: 0195121597
• Format: Hardcover
• Copyright: 1999-04-29
• Publisher: Oxford University Press

Summary

From networks to databases, email to voicemail, the amount of capital being invested in information technology each year is staggering. By 1996, U.S. firms were spending more than $500 billion annually on software, networks and staff. The recently merged Bank of America and NationsBank have an initial IT budget of 4 billion dollars. As firms like this push rapidly into the business world of the 21st century, the question has remained: how do firms measure returns from these substantial investments in information technology? Henry C. Lucas, effectively answers this question by providing a creative and reliable framework for measuring the competitive advantages and profits gained through investments in state-of-the-art information systems. There is value in information technology, and it is possible to show returns, Lucas argues--unfortunately this value just doesn't always show up clearly on the bottom line of a ledger. In five expertly presented sections, he spells out exactly what businesses can expect from their information technology investments--some investments create a measurable value, some do not, but all are important nonetheless. Through a precise mix of frameworks and models, such as an Investment Opportunities Matrix, and punctuated with real examples from successful firms, this is the first book to allow executives to see exactly how their information technology investment can be expected to return value, thereby maximizing their advantages in an age of global competitiveness. Indeed, firms who manage their information systems most efficiently are best suited to succeed in a rapidly evolving marketplace. With so much at stake, Information Technology is certain to be the essential guide for firms determined to compete and flourish in the highly competitive economy of the next century.

Author Biography

Henry C. Lucas is Professor of Information Systems, Stern School of Business, New York University.

Table of Contents

Preface	vii
Part I Introduction and the Garbage Can Model	1	(42)
Is it Reasonable to Expect a Return from Investments in Information Technology?	3	(22)
A Garbage Can Model and the IT Investment/Value Equations	25	(18)
Part II IT Investments Among and Within Firms	43	(36)
The Evidence for a Return Across Groups of Companies	45	(14)
IT Investments with Direct Returns	59	(20)
Part III Indirect and Less Obvious Returns from IT Investment	79	(70)
The Indirect Benefits from IT Investments	81	(14)
Investing in the Infrastructure	95	(14)
When IT Becomes a Part of Strategy	109	(16)
Investing in IT to Enable Change	125	(24)
Part IV Increasing the Chances for Successful Investment	149	(40)
Perspectives on Conversion Effectiveness	151	(10)
Implications for the IT Investment Decision	161	(28)
Part V Some Implications	189	(28)
Implications for Managing Information Technology	191	(12)
Where IT Value is Found	203	(14)
References	217	(6)
Index	223