Mistake as now shows greater part of it over past two

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mistake as now shows: greater part of IT over past two decades was software and IT services, not hardware IT services: installation of ERP systems by consultants ratio of non-hardware expenditure to hardware expenditure: 9:1 = 90% of investment in IT was not considered in prior studies because obtaining figures was impossible due to lack of data collection 4. WHERE HAS PROFITABILITY VANISHED Economics of new technology follows cycle: economic profit through use of small number of firms, spread throughout industry, reaping diminishing productivity gains, decrease of prices in products due to productivity gain end of cycle no productivity gains but firm must adopt technology to survive Mature technology: one with which workers have become comfortable and which they perceive as integral part of work environment; when technology moves from novelty to necessity; has no innovation benefits = no productivity gains 5. RESEARCH CHALLENGES 5.1 CHALLENGES IN MEASURING IT PRODUCTIVITY • impossible to measure productivity gains in service sectors, especially over different time periods
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Zoe Zwiebelmann Maastricht University IM Session 1 5.2 CHALLENGES IN MEASURING OUTPUT • very difficult when output product is service and not physical • using dollar value of outputs as proxy for output units distorts the picture (today 24$ worth, in 1 year 32$ worth) some use deflators but still does not yield real output figures • physical output units should be used when available 5.3 CHALLENGES IN MEASURING INPUT • when measuring IT input, there is no way of using physical units as input
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