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

By Henry C. Lucas Jr.

Book 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.

• Format: Hardcover
• Language: English
• ISBN: 0195121597
• ISBN13: 9780195121599
• Release Date: April 1999
• Publisher: Oxford University Press
• Length: 240 Pages
• Weight: 1.20 lbs.
• Dimensions: 0.9" x 6.3" x 9.4"

Customer Reviews

Book Review

Information Technology and the Productivity Paradox was a book that I was required to read by my AIS professor. I would have never chosen to read it, but it actually turned out to be one of the better books she assigned to the class. Lucas makes some very good points throughout the entire book. I like how he used examples of different companies that had invested in the different types of information technology that he wrote about. This book made me think outside of the box. I am an accounting graduate student and I knew that information technology investments was an issue that needed to be dealt with but I had no idea how badly behind we actually were. This book points out some very interesting ways of measuring information technology. I especially like the format in which he wrote the book. He basically points out to the reader what the entire book is going to be about in the first chapter. All of the chapters after the first one are an expansion of points he made in the first chapter. I think he gives the reader enough information in the first chapter for them to know if this book is going to give them the information they are looking for or if it is going to be a waste of their time. Also, in the first chapter he gives a chart called the Information Technology Investment Matrix. I found his chart very interesting. It gave the different types of information technology investments available as well as some comments provided by companies that have implemented those types of information technology investments into their business. I would not say it was the best book I have ever read, but defiantly one of the best that I have been assigned to read.

Good material, but tries too hard.

Lucas makes some excellent points regarding the benefits of investing in IT projects. The first part is written fairly well from a management perspective, but later rather than just presenting his ideas he spends a lot of time trying to come up with a contrived mathematical formula. It is obvious he spent a lot of time reviewing case studies to determine if any returns could be measured and does a good job of presenting the difficulties, but while this is difficult it is not impossible. He fails to show how real returns could realistically be estimated (vs. his model) and therefore showing the obvious academic nature of the book rather than presenting the material from a consulting or managerial point of view.

Excellent read - informed author.

This is an excellent read concerning the complex issues of the world of MIS. Explains how to effectively evaluate this relatively new management tool. The old rules are out but not disgarded concerning cost effectiveness. If you are planning on spending money on MIS or concerned that you are not getting your money's worth - read this!