CONTEXTUAL USABILITY_Brynjolfsson2

CONTEXTUAL USABILITY_Brynjolfsson2 - Beyond Computation:...

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1 Beyond Computation: Information Technology, Organizational Transformation and Business Performance Erik Brynjolfsson and Lorin M. Hitt Abstract To understand the economic value of computers, one must broaden the traditional definition of both the technology and its effects. Case studies and firm-level econometric analyses suggest that: 1) organizational “investments” have a large influence on the value of IT investments; and 2) the benefits of IT investment are often intangible and disproportionately difficult to measure. Our analysis suggests that the link between IT and increased productivity emerged well before the recent surge in the aggregate productivity statistics and that the current macro evidence may understate current IT-enabled productivity growth. Erik Brynjolfsson is Associate Professor of Management, Sloan School of Management, Massachusetts Institute of Technology, Cambridge, Massachusetts. Lorin M. Hitt is Assistant Professor of Operations and Information Management, Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania. Their e-mail addresses are <[email protected]> and <[email protected]> and their websites are <http://ebusiness.mit.edu/erik> and <http://grace.wharton.upenn.edu/~lhitt>, respectively.
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2 Computers and Economic Growth How do computers contribute to business performance and economic growth? Even today, most people who are asked to identify the strengths of computers tend to think of computational tasks like rapidly multiplying large numbers. Computers have excelled at computation since the Mark I (1939), the first modern computer, and the ENIAC (1943), the first electronic computer without moving parts. During World War II, the U.S. government generously funded research into tools for calculating the trajectories of artillery shells. The result was the development of some of the first digital computers with remarkable capabilities for calculation -- the dawn of the computer age. However, computers are not fundamentally number crunchers. They are symbol processors. The same basic technologies can be used to store, retrieve, organize, transmit, and algorithmically transform any type of information that can be digitized -- numbers, text, video, music, speech, programs, and engineering drawings, to name a few. This is fortunate because most problems are not numerical problems. Ballistics, code breaking, parts of accounting, and bits and pieces of other tasks involve lots of calculation. But the everyday work of most managers, professionals, and information workers involves other types of thinking. As computers become cheaper and more powerful, the business value of computers is limited less by computational capability, and more by the ability of managers to invent new processes, procedures and organizational structures that leverage this capability. As this area of innovation continues to develop, the applications of computers are expected to expand well beyond computation for the foreseeable future.
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This note was uploaded on 03/01/2011 for the course 1MD 021 taught by Professor Bengtsandblad during the Fall '10 term at Uppsala.

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CONTEXTUAL USABILITY_Brynjolfsson2 - Beyond Computation:...

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