The changing returns on IT investment

PurposePrior IT productivity research usually assumes constant returns on IT investment. This study suggests that the impact of IT investment on productivity may not be constant but may change with the IT investment scale and over time. Specifically, we divide IT investment into commercial IT and in-house IT and investigate their changing impacts on industry labor productivity.Design/methodology/approachA model of the productivity impacts of commercial IT and in-house IT with changing effects of scale and over time is developed and empirically tested based on industry-level panel data from the US. Bureau of Economic Analysis (BEA).FindingsThe returns on commercial IT investment increase with scale but decrease over time, while the returns on in-house IT increase over time.Originality/valueThis study provides a new perspective for IT productivity research by investigating the changing productivity impacts of IT investment. It also suggests that commercial IT and in-house IT should be distinguished, as they have different impacts on productivity.

Infoeconomics

The chapter discusses economics of informing or infoeconomics, which refers to costs and benefits of informing agents and to their contribution to organizational performance. Controversies questioning contributions of IT/IS to productivity (IT productivity paradox) and to competitiveness (IT commodification argument) are discussed. Several methods of assessing costs and benefits of informing agents are proposed. Assessing benefits from IT/IS, data, and knowledge is challenging since their impact is usually not immediately visible. The challenges have become more pressing with the data analytics and big data trends. Several research cases are used to demonstrate relationships between IVO aspects and infoeconomics. It is argued that a business process management model and balanced scorecard methodology are reliable guides for study and management of infoeconomics. The implications of big data and cloud computing on infoeconomics are discussed throughout the chapter.

Integrating Sustainability Into IT/IS Project Evaluation Methods

Sustainability is one of the most important challenges of our time. How can we develop prosperity without compromising the lives of future generations? Information technology (IT) and information systems (IS) provide organizations with the ability to change and improve business processes to better support sustainable practices. IT/IS evaluation methods should therefore reflect this ability and include criteria for the assessment of sustainability aspects of IT/IS projects. However, IT/IS evaluation methods are still dominated by the economical perspective that resulted from the infamous IT productivity paradox. This chapter aims to broaden the perspective on IT/IS evaluation by exploring the integration of indicators that reflect the concepts of sustainability into IT/IS evaluation methods. The analysis will conclude that integrating sustainability considerations in IT/IS evaluation requires far more than a set of additional criteria to be considered.

SPURIOUS ACTIVATION ASSESSMENT OF THERMAL POWER PLANT’S SAFETY-INSTRUMENTED SYSTEMS

Safety-instrumented systems (also called technological protections) play the significant role in prevention and mitigating of major accidents that can occur on thermal power plant. Activations of safety-instrumented system turn the power unit into safe state by shutting it down or reducing it productivity. The power generation process operates continuously. Any unplanned outage of generation equipment leads to undersupply of energy and big commercial losses to generation company. In Russia the values of allowed spurious trip rate for safety-instrumented systems are set by regulatory agency. These values are strict to all technological protections and do not take into account the differences in amounts of losses. This paper presents more flexible approach based on the Farmer’s risk criterion. Also risk reduction factor for spurious activation is proposed.