|
1. Introduction
Determining the benefits gained from using information technology (IT) to
improve business processes and the measurement of them has long eluded both
researchers and practitioners. The term IT productivity paradox was introduced
to describe observations that on a macro level it has been virtually impossible
to find any correlation between IT investments and productivity, or any
financial indicator for that matter.
Recent research has shown that the productivity paradox may not be real, or at
least not permanent (Brynjolfsson & Hitt 1998, Dewan & Kraemer 1998,
Lewis 1998, Reingold; Stepanek, & Brady 2000). Applying technology to
business takes a while, and measuring its impact is complex. The approach taken
here is that the wisdom is on the operative level. The impact of IT materialises
over a chain of enablers and effects, connected by choices and various
conditions. The fundamental objective of IT is to improve the quality of
information, i.e. the bits that tell a producer exactly what to do, when, for
whom and what knowledge bases and tools to use. Having done so, output becomes
more accurate and precise, thus reducing cost, improving customer satisfaction
and possibly opening up some new options of how to create value. This is as far
as IT goes. When it has delivered its operational results other mechanisms, such
as pricing, strategy, or volume, take over all the way to the bottom line.
In our five-year research project we have developed a theoretical expose and a
practical guide to building logical maps that show the actual and potential
business value of IT and its processes. The Finnish National Technology Agency
and a consortium of participating organisations funded the project. In this
paper, we use one of the organisations, a hospital, as a case study. Our focus
will be on the possibilities IT offers for building new ways of creating value.
2. IT productivity paradox
Productivity isn't everything, but, according to Paul Krugman, in the long run
it is almost everything. Paul Strassman initiated the debate about computers and
productivity. He demonstrated with extensive data that investments in computer
systems do not have a positive impact on productivity or profitability (Strassman
1997a, 1997b, and 1990). Since then the productivity paradox has captivated
numerous authors, pro and con. Further research has sharpened the picture and
the most recent results indicate that the "con"-side is winning, i.e.
the paradox is about to be solved.
Several explanations are offered. First, the data used to study the issue has
been collected on a macro level; it is highly aggregated and therefore does not
capture the reality very well. Second, it would be quite comprehensible that the
productivity impact of a new technology takes some time to materialise. In the
initial investment stage performance may even drop, but that can't yet be taken
as a proof of the fact that the technology itself is useless. Since IT affects
the very core of enterprises, the way they co-ordinate their activities with
information, it is natural that it takes some time for it to find the
appropriate applications. The essential unit of analysis should not be economy,
not even an industry, but a corporation.
Looking at the corporate level, it is plausible that investments are not done
with increased competitiveness in mind, but simply to stay in the race. If one
competitor starts to invest in IT and receives some benefits from it, an
"IT arms race" will be initiated. Following the Porterian model
(Porter 1980) of competitive advantage it is obvious that a generally available
technology will not for long provide sustainable advantage. As the performance
of all competitors increase, none is able to command a price premium. In the end
benefits go to customers, often in the form of qualitative improvements in
products and services, that are hard to capture by productivity statistics.
According to the Porterian model advantages are not produced by generic
solutions with off-the-shelf products but by customisation and application to
particular processes. The question thus remains how to evaluate and assess the
impact of IT on business processes. The fundamental principles here are,
firstly, that technology by itself is not doing anything; therefore causal
modelling is not appropriate. Instead, enabler-effect models should be used.
Such a logical chain can be interrupted at various points if certain
requirements are not fulfilled. Therefore enabler-effect models can account for
poor decisions or insufficient supporting conditions at any point in the chain.
Secondly, it will not be possible to produce a sufficient set of conditions
explaining a benefit in advance; only a list of necessary conditions can be
identified. Thirdly, there is no direct link from IT to the bottom line. The
effects pass through various operational process indicators. Therefore the
benefits of IT should be measured in operational terms close to the interface
between operational and financial indicators. A model of the operational
indicators following performance measurement models, such as the Balanced
Scorecard (Kaplan & Norton 1996), is necessary.
The EEM model is based on the view that the main impact of IT on business
processes and their performance is caused through control information, that is,
the information that guides various activities and is collected in various
databases for further use and analysis. The primary impact of IT systems is on
the quality of control information, i.e. its reliability, accuracy, timeliness,
relevance and other possible aspects. In addition, IT systems provide some
straightforward benefits through pure factory and office automation, but these
are not discussed in this article.
Information is defined as a part of a hierarchy of bits. Data is symbolically
communicable representations of states and events. Information is value-added
data put into a context with a meaning. Knowledge is dynamic understanding of
how the world works. Information and knowledge meet at the point of value
creation. Applying a time perspective we can say that both can be ex ante,
predictive of what is to come, and ex post, telling what has already happened.
3. The Enabler-Effect Map
The Enabler-Effect Map (EEM) uses navigation as a metaphor. Planning,
implementation, follow up and further development of IT investment are seen as
continuous tasks striving for maximising impact, effectiveness, and usability
related to business objectives. In order to achieve the best payback of IT, an
investor has to have a clear picture of how and through which mechanism the use
of IT impacts her processes and business as whole. The route from the use of IT
to the captured benefits is surely stony, and this is where EEM may turn out to
be handy (Holopainen, Lillrank & Paavola 1999 and 2000).
While there is no one best way to success, some common elements can be found.
The most essential is a concept named the hill of IT-benefits. It is an
obstacle, a challenge and an opportunity that all the IT investors have to face
in order to achieve sustainable benefits. The hill of IT-benefits symbolises two
interrelated things. First, it portrays the abstraction level of matters a
wanderer meets within the map of IT-benefits. The abstraction level increases
while approaching the peak, illustrating that some parts of the enabler-effect
chain may be intagible, abstract, or non-obvious. Secondly, the hill emphasises
the significance of the utilisation rate. In many cases benefits simply depend
on how widely the system is used for its purpose. If e.g. a half of the salesmen
use a sales support system, it may be as useless as if only 5% would use. There
is always a rate - whether it is 60 or 100% - after which benefits start to
accumulate.
The idea of EEM is to provide a framework - some basic descriptors of the
terrain and a compass - that can be used in planning, implementation and further
development of IT investments. Two paper lanterns serve as symbolic beacon of
benefits and beacon of bearings, marking the start and the end points of the
map. The beacon of benefits cuts off the evaluation of IT effects and benefits
at the operative performance level, as suggested previously. Operative
capability is categorised into customer perceived value, cost savings and
business option value. The beacon of bearings marks the starting point of the
effort.
The Beacon of Benefits
Customer perceived value encompasses all the benefits that are obtained by the
internal or external customers of an IT-supported process. The difficulty with
customer value is its subjectivity. Different customers perceive different
things as valuable. Fast delivery, for instance, may be of great importance to
one customer but meaningless to another. The logic of benefit materialization
may continue by assuming that higher customer value leads customers to pay more,
buy more and remain loyal, that is, improvements in price realisation, revenue,
market share and customer retention. Several other things, such as pricing
strategies, competitors' movements, as well as exchange and interest rates, may
affect these benefits. Therefore the connection between IT-investment and
financial results appears as even thinner as one works his way through the
PL-statement from gross revenues towards the bottom line.
Cost savings capture benefits received by the supported process itself. They are
the easiest benefits to evaluate and measure. Most IT-investors go after them as
the financial effect usually can be calculated to the level of operating profit.
However, a number of studies suggest that investments striving for higher
customer perceived value tend to be more profitable than those with a cost
reduction focus (Hitt & Brynjolfsson 1994).
Business option values differs from the two other mentioned categories of
operational performance. Customer value and cost savings behave linearly, i.e.
they materialise as created; while business option value behaves like a stock
option. It is an opportunity generated by usage of IT. It must be cashed out by
a strategic move, such as introducing additional services, repositioning
customer segments, or introducing new pricing schemes; otherwise it remains
useless (Lillrank & Holopainen 1998). Ultimately business option values
materialize as customer benefits and cost savings, the difference is in the
requirements of realization. There is, though, a third category of option
values, namely increased precision and flexibility in formulating and executing
strategies. IT systems may offer possibilities to analyze and understand a
business in a new way in order to create new types of value propositions.
Beacon of bearings
Three things determine the starting position on the way from IT to benefits. The
most important is the business process in which the new IT-system is used. It
has to be changed and designed so that IT-support is meaningful (Davenport 1993,
Hammer & Champy 1993). Existing IT-infrastructure as well as skills and
attitudes of employees set some preconditions for the investment. Finally, the
IT-application represents the object of investment.
EEM provides a perpendicular view on process flow charts. As flow charts depict
material and information flow in a certain process, EEM states how IT usage
combined with process changes impacts performance. Numerous things that are not
connected in flow charts usually cause the impact. Therefore the use of EEM
opens a new view for persons in charge of organisational development. EEM can be
used to analyse training requirements in different phases of a business process.
Especially, it can be used to motivate personnel to use a new system as the
whole picture of an IT investment emerges. A comprehensive EEM helps an
individual worker understand why it is important to use the system even though
the benefits may materialize somewhere else in the system. This is significant,
as IT often takes tasks from one and gives to another.
Terrain for benefits
In determining the ground between the two beacons EEM analysis uses three maps
of different scales. The first map, lets say in the scale of 1:100.000,
illustrates the rough features of the ground (Figure 1). The second map depicts
the ground at a more detailed level (Figure 2). Finally, the third map
represents a real case (Figure 3).
Figure 1:
Rough features of the terrain – Map of IT-benefits in scale 1: 100.000.
Closest to the beacon of bearings and the business process lie the enablers.
They are preconditions for better control information. In practice these
conditions are related to data integration, i.e. inputting, handling and using
data in the different phases of the process.
In a business process the pure IT-benefit is better control information. As
mentioned before, it is located in the middle of the map on the hill of
IT-benefits. By looking at the hill more precisely with the second map, two
peaks emerge. The peaks represent the two aspects of control information: ex
ante -steerability and ex post -traceability.
Ex ante -steerability means a possibility to manage operations and processes
better with the help of real-time or on-line information. The tasks to be
performed in the near future can be foreseen when processes are transparent
enough. Ex post -traceability refers to the possibility of using recorded and
stored data for analysis and planning. Operations can be traced backwards in
order to see what went well and what went wrong. Likewise, the history of a
certain deliverable can be traced and thereby possible sources of error can be
found.
On the way down from the hill of IT-benefits the effects of ex ante -steerability
and ex post -traceability get mixed with other factors. This is why the model
uses "enabler-effect"-logic. Even though IT does its job perfectly,
which it always doesn't, we cannot be sure that performance will be better.
Think of delivery precision. It is absolutely essential that all the parties
involved have the needed information about the order in question. Likewise, they
must receive timely information of last minute changes. Even if all this
information were available, there would be no guarantee that the delivery will
be in time. Information only enables the precise delivery. It may happen that
there is a strike in the supplier's factory, an important person is sick or the
shipping truck gets into a traffic accident because of a bad weather, or simply
the available information is ignored and not used. A mirror image of this is a
situation where the delivery is on time in spite of missing information simply
because local actors are flexible, motivated and resourceful in compensating for
bad or missing information.
In EEM the path downward the hill falls into three main routes, precision and
flexibility, knowledge management, and resource allocation. Precision and
flexibility brings us close to the customer perceived value in the beacon of
benefits. Resource allocation, in turn, is related to internal efficiency and
thereby leads to cost savings. Knowledge management, mainly its explicit side,
takes the wanderer towards the business option value.
Naturally, the routes mix and cross each other and they get more precise
meanings in real life cases. Some general elements, found in most of our cases,
can be mapped. These are collected in the figure below depicting the EEM in
scale 1:50.000.
Figure 2:
Most detailed general terrain – Map of IT-benefits in scale 1: 50.000.
The third level of EEM, let it be in scale 1:20.000, is the actual analysing
tool (see Fig 3). It comprises of standard symbols used to illustrate
checkpoints on the path from the actual use of IT, the beacon of bearings, to
the results from IT utilisation, the beacon of benefits. These checkpoints - and
connections between them - are built based on the logic presented in the higher
level maps.
The set of symbols
Each single path marked on the map starts from a process chain described in the
Beacon of Bearings. It includes the main phases of the process, i.e. the
functions of a flow chart description in which the application under
consideration is used. In this way the ultimate source of IT benefits is made
clear graphically. No benefit is given to the world, unless someone does
something somewhere, either automatically or manually.
The functions are linked to enablers, which are conditions related to activity
for the emergence of benefits. These are described with white-based circles,
which can sometimes form long chains. The enablers are of a dualistic nature:
the previous circle on the map enables the next one in the chain, at the same
time representing the impact of the circle before it. The circles are
"checkpoints" on an orienteering route, intermediate targets on the
way towards the finish. A checkpoint in the middle of a chain can as well be
called an enabler as an effect or as the benefit itself, because all these are
pearls in the enabler-effect chain on the way towards Beacon of Benefits i.e.
value experienced by the customer, cost savings and option value.
The links between two checkpoints are illustrated with arrows. They describe the
mechanism justifying the move from one checkpoint to another. In other words,
their task is to explain why the previous checkpoint enables the following
checkpoint and the ones after that. For this reason the arrows must be numbered,
so that they can be referred to in the text explaining the map. Because the
arrows do not describe causal relationships, the greatest wisdom of the model
lies in explaining these arrows. Arrows can point at one checkpoint from
different directions. In that case each arrow increases the effect of the
checkpoint on the map, independent of the other arrows. One checkpoint may
require several simultaneously affecting enablers to materialise. In that case,
the arrows of the enablers in question combine at the latest when they meet the
circle. The effect of an enabler on a checkpoint may as well weaken its effect,
i.e. be negative. An arrow can then be marked with a long broken line.
In addition, grey circles, unrealised enablers, i.e. checkpoints that have not
yet been placed in position can be marked on the map. The anticipation of the
enabling relationships due to these may be the best output of the entire map
drawing exercise: in which enabler should be invested next, which part of the
effect network should be strengthened to achieve the biggest benefit with regard
to the whole entity. The links coming to and leaving from a checkpoint still
under planning are illustrated with an arrow consisting of short broken lines
and an empty tip.
All checkpoints on the map have not necessarily been made easy for the orienteer:
one may be up in a tree, the other on a steep rock and the third stand several
metres deep under water. So if there are any special conditions for finding a
checkpoint, they should also be marked on the map: at one checkpoint you need a
ladder, at the other lots of courage and at the third one a snorkel and
flippers. Depending on the checkpoint, getting there may - in accordance with
the metaphors used - be hindered by the lack of equipment, sufficient facilities
for their use or both. On the EEM, the conditions related to the use of an
application are described with grey-based boxes, which are identified with
letter codes. The conditions related to the actual application are illustrated,
to separate them from the former case, with stickers with rounded corners. The
EEM-analysis requires understanding of both the business process and the IT
application in question. One does not need to be an IT-specialist, but to have
an understanding of IT in the application level, i.e. what can or cannot be done
with a specific system. In that sense EEM is a tool for experts An EEM
illustration is usually based on a massive information about the process,
IT-systems, work habits, business culture, etc. Its main task is to present all
relevant matters in a single, condense picture. Therefore it should be
accompanied by written explanations about the links between checkpoints.
In the following, we use EEM to illustrate the logic behind business option
value in a certain health care application. The map outlined in the case
illustrates somewhat loose way to use of the set of symbols. More detailed
examples with wider range of EEM symbols in use can be found in the book (Holopainen,
Lillrank & Paavola 2001) that presents the EEM concept and its foundation in
full detail. See also www.procti.homepage.com.
4. An example of business option value from health care
The focus of the example is on cross-functional processes with two different
actors at two different locations: a health center (HC) general practitioner
(GP) referring a patient to a specialist (SP) located at a regional hospital (RH).
The ensuing business process tends to consist of complicated movements of
information, people, and money. In this example we concentrate only on analysing
the factors behind the change that took place when paper referrals were replaced
with electronic referrals. The business process changed as a business option
value emerged.
Our example is based on a study (Harno et al 2000) that took place from February
through November 1998 focussing on two healthcare units in southern Finland with
comparable sizes, resources and demographic bases. Both units, A and B, consist
of a hospital and several HCs serving populations around 150 000 people. Both A
and B use similar internal administrative processes, however, A has an intranet
-type system connecting the hospital with health centers while the information
process between the parties in unit B is done traditionally with paper
documents. All internal medicine cases that were referred from health centers to
the hospitals during the time of the study were included. To compare the logic
between various medical disciplines, orthopaedic surgery cases were also
included; these findings are, however, not elaborated in this article.
To better understand the behaviour of the business options in hand, it is in
order to note that the traditional referring process has its roots in the late
19th century England. There were three medical proficiencies operating in
hospitals: surgeons, doctors and pharmacists. The third group was later called
general practitioners, and before the turn of century they were pressured to
leave hospitals. As a result, citizens had no longer free passage to hospital
care without seeing a general practitioner first.
In the health care business process a patient approaches a HC and is examined by
a GP. In roughly 95% of visits, the HC can handle the whole case. The remaining
five percent of cases requires specialists resources for diagnosis, tests,
treatment or all of these. In such cases a referral is sent to a SP and
classified by the sender into one of three categories of urgency. Class I
requires treatment within a week, II within four weeks, while class III may wait
up to three months. The behaviour behind the sending of a referral can be
explained by many factors. E.g. personality of individual GPs, tolerance of
insecurity, work environment, economic incentives and the format of a health
care system may all have an effect to tip the scale in favour of referring.
At the hospital, after examining an incoming referral, the SP confirms its level
of urgency, again in one out of the three categories. Within the given time
period the patient will be invited to hospital for consulting. The other option
would be to send the referral back to the GP if the SP decides the case does not
warrant specialist care. In practice, however, almost all referrals lead to a
hospital visit. During our study the SPs working with traditional paper
documents estimated that one out of five cases could have been treated at a HC
with the help of some consultation. However, they felt that inviting a patient
in for consulting, normally 20 minutes, was less troublesome and took less time
than writing and mailing instructions back to the GP. Further, there were no
economic incentives to take this trouble, since the local governments paid
hospitals by the number of patients actually called in. In sum, the business
process had neither procedures nor incentives for optimal resource allocation.
The hospital A in our study was built in the early 1990's. The HCs in the
corresponding health care unit A were linked to the new hospital with a
tailor-made Intranet -type- system. Initially it was assumed that the system
would simply replace paper forms and mail, and allow electronic filing. Thus the
effects were assumed to be speedier traffic of information and better security
on patient record keeping (see the white-based circles in figure 4). There had
been some plans to use the new information route also to integrate secondary and
primary care providers with an electronic referral system linked to an
electronic medical record. However, nobody knew what the new process would look
like, or even less, if the procedures were going to work at all. The precautions
were justified since the effects of an integrated electronic referral system
used for teleconsultations had not been studied.
For a few years the system was utilised as such, a speedway for one-way referral
traffic giving the predictable, but rather minor impact on the performance of
the whole system. Only after a few SPs in the internal medicine area started, on
their own initiative, to utilise the system for teleconsultation with promising
results, the other SPs in the same area joined in. When the local governments
revised teleconsultations to be part of the economic system, in other words the
hospitals were allowed to include them as well as actual visits as basis for
remuneration, a new business process was officially born.
In sum, a three-step evolutionary process could be observed. The traditional
paper-based process, still at use in case B, was the starting point. An
IT-system was introduced at case A as simple office automation with electronic
documents replacing paper. This led to predictable effects in transfer speed and
filing effectiveness. The system is used, still, as such in most medical areas.
As a third step, users started to play around with the system creating an
entirely new business process in the course.
The impact of IT-based referral system
The basic assumption when the integrated referral system was installed was that
some 20% of referral cases could be treated at a HC with the help of
teleconsultation. In practice, the amount was more than double. The ratio of
referrals that were returned to the HC grew to 50% of all referrals.
The consequences from this were, first, that the number of patients who were
asked to actually visit a SP was reduced to half thus reducing the burden on
specialist resources (figure 6: less secondary hospital visits). According to
the doctors involved, this happened in 75% of the cases without any observable
problems to fulfilment of the appropriate treatment (figure 6: effectiveness of
treatment). Second, it was discovered that the rate of teleconsultations given
by SP varied depending on referral urgency. Only 10% of the most urgent,
priority I referrals lead to the use of teleconsultation, while the percentage
was 30 for category II, and over 50 for the category III referrals.
Consequently, the major cycle time reduction came to the least urgent cases
(figure 6: faster response for less urgency patients). Third, the number of HC
patients, whose problems got the attention of a specialist through
teleconsultation, roughly doubled from five to ten patient visits out of hundred
(figure 6: lower threshold to get SP's opinion). This was due to the learning
experience to utilise co-operation with SPs in borderline cases. As a fourth
effect can be added the hard to measure effects that frequent exchange of
experiences had on learning on the HC side.
Figure 3
Enabler-Effect Map for the use of electronic referral system
Encouraged
by the positive results achieved in internal medicine, the possibility of
expanding the system into other disciplines was discussed at hospital A.
Orthopaedic was used as a comparative case, since its business process is in
many ways different. Internal medicine is, by and large, an intellectual process
where specialists make conclusions from pieces of information of symptoms,
medical histories and laboratory tests. The information used is reasonably well
structured and treatment is often medication. In orthopaedic surgery the
situation appears to be different, as the diagnostic process is based more on
tacit knowledge and the SP frequently needs direct observations of bones and
joints. Orthopaedic SP’s were not inclined to use E-mail consultations,
therefore a video conferencing system was installed allowing the SP’s to study
x-ray images and the patient located at HC while interacting with the GP. In
half of the cases video conferencing was found to work satisfactorily, however,
it did not reduce the number of patients that were eventually sent to the
hospital. Consequently the relatively cheap e-mail system in internal medicine
yielded a better return on investment than the costly video conferencing system
in orthopaedic.
5.
Discussion
In
recent years the admiration of technology for its own sake has been replaced by
a more pragmatic view. Apart from its value as a status symbol, information
technology has been used mainly to automate repetitive processes and
bureaucratic functions. Only with the introduction and spread of the Internet
and other network solutions in the mid-1990’s have we begun to recognise new,
hitherto unseen, possibilities.
This
is illustrated by the so-called Nebuchadnezar test. Imagine yourself as an
eastern despot controlling 10,000 fit and obedient slaves, and unlimited
quantities of pencils, writing paper, fixed line telephones and mopeds. Then
compare yourself to a normal network PC user. What can you achieve with your PC
that all the slaves – even theoretically – cannot do, even given a little
more time? From this we begin to see the twin benefits of the information
society. There are some things, which are the same as they have always been; we
can simply do them faster and cheaper now, and make them available to a wider
group of users. But there are also things, which are entirely new, different and
unprecedented. The triumphal march of creative IT utilisation has created
framework for interesting new business options.
To
invest without expecting economic returns is like throwing coins into a wishing
well. If the IT people shroud themselves technical jargon, it can be tempting
for business managers to turn over the development of technology strategies to
the computer specialists and concentrate on other issues. This may lead firms to
jump to technology solutions before examining the consequences for their
business. Although it has been argued there is no correlation between the amount
money spent on IT and the revenue due to it, we argue of course there is, a wise
investment has always paid itself back. The only question is how can you tell
that in advance? And further, can you even pinpoint the benefits gained
afterwards?
This
article presented a model, Enabler-Effect Map that allows companies, business
managers in co-operation with the IT people, to analyse the ramifications of IT
investments in their business on a broad perspective. It takes the perspective
that IT is just an enabler, i.e. as such it does not provide anything valuable.
Instead, it should be cleverly used to transform and support business processes
as well as work practices. We argue that substantially all the benefits IT
offers are created through improved steering information. Temporally steering
information can be divided into ex ante and ex post information. This division
helps in understanding the impact of improved information on processes.
The
model divides benefits into three pools – customer perceived value, cost
savings, and business option values. Based on our various case studies the
latter appears to be the most interesting one. The impact of new IT can be
better understood if all critical subjects that cause or enable customer
satisfaction and cost savings are known. By mapping the effects these enablers
have on each other we gain more deep understanding on the issues that are behind
the enhanced productivity – benefits that can be described on qualitative and
quantitative terms. The Enabler-Effect Map introduced on this paper can be used
during the whole life cycle of an IT-investment. The division of benefits into
customer perceived value, cost savings and business option values allows
managers to
·
see how
different stakeholders perceive various benefits
·
separate
quantitative and qualitative benefits
·
consequently,
estimate the “price” of quantitative benefits in case the quantitative
benefits, cost savings, do not cover the investment costs
·
understand the
business options the use of a certain IT-system provides, and
·
understand how
and when options should be materialised.
Recognition
of the business option value is essential for profound strategic management as
the example from health care sector in this paper illustrated. Although the
acceptance of IT varied between medical disciplines, the difference of IT’s
impact on internal medicine compared orthopaedics was somehow surprising.
Business option value enabled new ways for IT to bring value and to enhance
productivity only in the first case. We believe there lies a simple explanation
behind this. While internal medicine can be described as a rather fixed-format
information system, orthopaedics relies more on direct sensory inputs and tacit
knowledge. Consequently, the natural logic of information and knowledge
processing in various areas needs to be examined carefully before investing in
IT – and even so the benefits may arise in a surprising way. Based on our
various case studies we argue this phenomenon is valid for all lines of business
when tackling with new information technology investments.
6.
References
-
Brynjolfsson,
E. & Hitt, L. (1998) “Beyond the Productivity Paradox”, Communications
of the ACM, Vol. 41, No. 8., pp 49-55.
-
Davenport,
T. H. (1993) Process Innovation –
Reengineering Work through Information Technology, Harvard Business School
Press, Boston.
-
Dewan,
S. & Kraemer, K. L. (1998) “International Dimensions of the Productivity
Paradox”, Communications of the ACM,
Vol. 41, No. 8., pp 56-62.
-
Hammer,
M. & Champy, J. (1993) Reengineering
the Corporation – A manifesto for business revolution, Harper Business,
New York.
-
Hitt,
L. & Brynjolfsson, E (1994) ”Creating Value and Destroying Profits? –
Three Measures of Information Technology’s Contribution”, http://ccs.mit.edu/papers/CCSWP183.html.
-
Harno,
K.; Paavola, T.; Carlson, C. & Viikinkoski, P. (2000) Patient
Referral by Telemedicine: Effectiveness and Cost Analysis of an Intranet System.
Journal of Telemedicine and Telecare, Vol. 6, No. 6, pp. 320-329.
-
Holopainen,
S.; Lillrank, P. & Paavola, T. (1999) Tietotekniikan
linkki liiketoimintaan, Otava Publishing Company, Helsinki, www.sytiryti.com.
-
Holopainen,
S.; Lillrank, P. & Paavola, T. (2001) Linking
IT to Business, Studentlitteratur, Lund (in press), www.procti.homepage.com.
-
Kaplan,
R. & Norton, D. (1996) The Balanced
Scorecard – Translating Strategy into Action, Harvard Business School
Press, Boston, MA, USA.
-
Lewis,
T. (1998) Why the Economy Is So Good,
Computer, May 1998, pp. 110-112.
-
Lillrank,
L. & Holopainen, S. (1998) Reengineering
for Business Option Value, Journal of
Organizational Change Management, Vol.
11, No. 3, pp. 246-259.
-
Lillrank,
P.; Holopainen, S.; Lehtovaara, M. & Sippa, S. (1996) The
Impact of ICT on Business Performance, HUT, Department of Industrial
Management and Work and Organizational Psychology, Working Paper No. 1, Espoo.
-
Porter,
M. E. (1980) Competitive Strategy –
Techniques for Analyzing Industries and Competitors, The Free Press, New
York.
-
Reingold,
J.; Stepanek, M. & Brady, D. (2000) Why
the Productivity Revolution Will Spread, Business Week, February 12, pp.
48-51.
-
Strassman,
P. A. (1990) Business Value of Computers,
The Information Economic Press. New Canaan, CT, USA.
-
Strassman,
P. A. (1997) Will big spending on computers guarantee profitability?, Datamation,
February 1997, pp. 75-85.
-
Strassman,
P. A. (1997) The Squandered Computer –
Evaluating the Business Alignment of Information Technologies, The
Information Economics Press, New Canaan, CO, USA.
|
