it does not matter
DESCRIPTION
bhagoTRANSCRIPT
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Indian Institute of Management, Lucknow
Introduction to Management Information Systems
Amit Agrahari Asst Prof of Information Technology and Systems
Indian Institute of Management, Lucknow
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Indian Institute of Management, Lucknow
Agenda and Key Take Away
Agenda Introduction to the course It fails ! Management of Information Systems ITs productivity paradox
Key Take Away IT as a socio technical system IT fails and may not increase firms productivity
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Indian Institute of Management, Lucknow
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Indian Institute of Management, Lucknow
Robert N. Charette (2005) Why Software Fails http://spectrum.ieee.org/computing/software/why-software-fails/0
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Indian Institute of Management, Lucknow
Information Systems and Firms Productivity
Source: Based on Erik Brynjolfsson and Lorin M. Hitt, Beyond Computation: Information Technology, Organizational Transformation and Business Performance. Journal of Economic Perspectives 14, no. 4 (Fall 2000).
Lo
Hi
Lo Hi
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Indian Institute of Management, Lucknow
The Socio-Technical System
Can Blogs and Wiki be used for knowledge management in GOI departments?
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Indian Institute of Management, Lucknow
IT Productivity Competitive Advantage
Steven Roach, Chief economist, Morgan Stanly, (1987) IT stock has no impact on Productivity
Robert Solow (1987) We see the computer age everywhere except in productivity
statistics
Mckinseys study on US productivity growth 1995-2000 found negligible impact of IT on productivity improvement in 53 sectors(70% of the economy)
Nic Carr (2003) IT is a commodity, it cant bring any competitive advantage
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Indian Institute of Management, Lucknow
Productivity Paradox Explanations
Measurement Systematic bias in conventional productivity measurement that prevent
accurate assessment
Lags due to learning and adjustments It usually takes 2 to 3 years before the benefits are realised Managers should rationally account for lags
Redistribution IT rearranges the shares of pie without making it any bigger One firms gain comes entirely on other firms expense (Auction)
Mismanagement IT might increase organizational slack instead of output or profit Should we readjust people or fire them? (Can you fire them) Benefits are passed on to customers (Railways online reservation)
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Indian Institute of Management, Lucknow
Productivity Paradox
Eric Brynjolfsson (1993) Cracking productivity paradox. Around half of IT value is due to unique characteristics
of firm Other half is shared generally by all firms
IT
Decentralization
Low
High
High
Low
0.0161
-0.03660
0.0455
Erik Brynjolfsson and Lorin M Hill (1998) Beyond the productivity paradox http://ebusiness.mit.edu/erik/bpp.pdf
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Indian Institute of Management, Lucknow
Complimentary assets
Assets required to derive value from a primary investment. Business Model Processes Decentralized and distributed decision making Organizational culture (Does culture affect IS or IS
affect culture) Training Collaborative work environment Standards
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Indian Institute of Management, Lucknow
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Indian Institute of Management, Lucknow
Does IT Matter?
World spend on IT USD 2 Trillion per year
Assumption : ITs potency and ubiquity have increased, so too has its strategic value
Scarcity and not ubiquity offers competitive advantage
Processors, data storage, & networks are available to all. IT is a commodity
Year % of Capital exp of American Firms
1965 5%
1980 15%
1990 30%
2000 50%
US dept of commerces bureau of economic analysis
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Indian Institute of Management, Lucknow
Does IT Matter ?
Proprietary v/s infrastructure technologies
IT as commodity IT is a transport mechanism, so more valuable when
shared IT is highly replicable endlessly and perfectly
reproducible at no virtually no cost. Combined with standardization it dooms most infrastructure technology
Internet accelerate commoditization Lower cost of computing
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Indian Institute of Management, Lucknow
The Sprint to Commoditization
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Indian Institute of Management, Lucknow
IT Doesnt Matter
IT offered competitive advantages during build out phase, which is coming to and end Its power is outstripping most of the business needs it fulfills Price has dropped to a point where everyone can afford it Data transfer capacity is more than demand IT vendors are positioning themselves as utility suppliers Investment bubble
Can infrastructure technologies bring competitive advantage Does IT bring more value as infrastructure technology (ATM)
Today, no company builds its business strategy around electricity usage Spend less (IT is a commodity) Follow dont lead (Reduce risk) Focus on vulnerabilities ( Cede control over IT and focus on resulting
vulnerabilities)
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Indian Institute of Management, Lucknow
The CHAOS Report 2009 on IT Project Failure
Year 2009
Year 2006
Year 2004
Year 2002
Year 2000
Year 1998
Year 1996
Year 1994
Successful 32% 35% 29% 34% 28% 26% 27% 16%
Challenged 44% 19% 53% 15% 23% 28% 40% 31%
Failed 24% 46% 18% 51% 49% 46% 33% 53%