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A great deal of controversy exists about the impact of information technology on firm performance. While some authors have reported positive impacts, others have found negative or no impacts. This study focuses on Electronic Data Interchange (EDI) technology. Many of the problems in this line of research are overcome in this study by conducting a careful analysis of the performance data of the past decade gathered from the assembly centers of Chrysler Corporation. This study estimates the dollar benefits of improved information exchanges between Chrysler and its suppliers that result from using EDI. After controlling for variations in operational complexity arising from mix, volume, parts complexity, model, and engineering changes, the savings per vehicle that result from improved information exchanges are estimated to be about $60. Including the additional savings from electronic document preparation and transmission, the total benefits of EDI per vehicle amount to over $100. System wide, this translates to annual savings of $220 million for the company.

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In interorganizational settings the use of information systems (IS) and networks is often not evaluated in a formal way and decisions are made by "gut feeling" rather than based on rational evidence. Since benefits depend not only on internal contingencies but also on the decisions and loyalty of business partners, issues of trust and the risk of becoming locked in with a disloyal partner become crucial. The Internet and Web-based technologies facilitate system development and the deployment of interorganizational systems (IOS) and may thus help change this picture. In times where IT use is becoming more and more important for the firm to stay competitive and efficient, system costs and benefits have to be carefully balanced in order to build systems that are perceived as being beneficial even in cases where risk-aversion makes this a difficult task. This paper examines applications that support inter-firm business transactions, in particular those that involve buying processes. We int...

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Abstract — This paper proposes using financial loss functions to estimate the impact that IT Service Level Agreements (SLAs) have on business process performance. For that, an organizing framework based on Balanced Scorecard concepts is first presented to tie those functions to strategic business processes; and then, the impact of service levels on business performance is estimated using quantitative techniques from management science. The result is a quantitative approach for SLA objective setting and investment allocation to improve business results. The approach serves as decision support for investment policies within an ITIL Financial Management for IT Services context. Application to the case of a drugstore chain showed that the approach is instrumental in analyzing complex IT servicebusiness process interdependency scenarios. The approach helped the chain’s executives identify and recommend which IT services should receive investments. Index Terms — service level agreements, policy-based management,

Novel innovations in the area of digital media are changing the ways we communicate and organize. However, few practical measures exist for analysing the digitalisation of organizational communication as an intermediate factor in the initiatives to adopt new information and communication technologies (ICT). Building upon the genre theory of organizational communication, a categorization of communication forms, and quantitative measures we suggest such metrics and a measurement method. A case study applying them in an industrial organization suggests the method and metrics to be applicable for quantifying how new information systems affect to organizational communication as well as for anticipating their digitalisation impact prior to the implementation. The metrics provide a basis for further work on analysing correlation between organizational performance and adoption of information and communication technology.

Many researchers have noted that large information technology (IT) investments in the United States have not been accompanied by gains in productivity. This phenomenon has been termed the "productivity paradox". The assumption underlying this paradox is that IT should enable individuals and organizations to become more productive. The purpose of this paper is to provide insight into the results of some of the widely cited studies on the productivity paradox. In particular, we examine the conditions under which organizations should not expect investments in IT to lead to productivity gains. In fact, there are times when companies should invest in technology that will decrease overall productivity, because doing so will increase organizational profits. In the model we developed, a profit maximizing, rather than a productivity maximizing, monopolist chooses the quality (i.e. performance, features, etc.) and the price for a single product. We show how the impact of IT on the profitability ...

Most observers would agree that the explanatory capabilities of current theories of electronic intermediation on the Internet fall short of having the desired power. Instead, the patchwork quilt of theoretical assertions, conflicting empirical results, and revealing case studies that characterize the existing literature point to the need for a new synthesis. This article makes an attempt to do just that by proposing an explanatory and predictive contingency model for intermediated and non-intermediated market structures. We distinguish between direct and intermediated markets, as well as traditional and electronic markets in a two-by-two classification grid allowing a number of industry examples to be typed. Explaining why the industry examples end up in those “buckets ” required deeper reasoning, on the basis of a blend of existing and emerging theory, not all of which delivers the same predictions. For this reason, our proposed contingency model leverages a variety of elements of the existing theories and empirical findings (including transaction price, search cost, liquidity, trust, expertise, risk exposure and technological adaptation cost), which enable us to usefully interpret three illustrative mini-cases involving the airline ticket market, the used car market, and the antiques and collectibles market. Our findings provide preliminary support for contingency model as interpretative tool for management.