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

by Henry C. Lucas

Overview

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.

Product Details

ISBN-13:	9780195121599
Publisher:	Oxford University Press
Publication date:	04/29/1999
Edition description:	New Edition
Pages:	240
Product dimensions:	9.20(w) x 6.10(h) x 1.10(d)

About the Author

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

Table of Contents

Preface                                            viiPart I  Introduction and the Garbage Can Model     1   Chapter 1  Is it Reasonable to Expect a          3   Return from Investments in Information   Technology?   Chapter 2  A Garbage Can Model and the IT        25   Investment/Value Equations Part II  IT Investments Among and Within Firms     43   Chapter 3  The Evidence for a Return Across      45   Groups of Companies   Chapter 4  IT Investments with Direct Returns    59 Part III  Indirect and Less Obvious Returns        79 from IT Investment   Chapter 5  The Indirect Benefits from IT         81   Investments   Chapter 6  Investing in the Infrastructure       95   Chapter 7  When IT Becomes a Part of Strategy    109   Chapter 8  Investing in IT to Enable Change      125 Part IV  Increasing the Chances for Successful     149 Investment   Chapter 9  Perspectives on Conversion            151   Effectiveness   Chapter 10  Implications for the IT              161   Investment Decision Part V  Some Implications                          189   Chapter 11  Implications for Managing            191   Information Technology   Chapter 12  Where IT Value is Found              203 References                                         217 Index                                              223