Returns from Information Technology Investments
How complementary social, managerial, and organizational assets help optimize returns from information technology investments? The research (Management Information System by Kenneth C Laudon and Jane P. Laudon, 12th Edition) has shown that information technology does not by itself guarantee good returns because company’s social, managerial, and organizational assets play important role on helping the company to optimize returns from information technology investments.
The followings are some of main aspects that company’s social, managerial, and organizational assets help the company to optimize returns from information technology investments: First, favorable organizational assets are supportive business culture that value efficiency and effectiveness, appropriate business model. Efficient business process, decentralized of authority, highly distributed rights, and strong information system development team. Organizational assets are so critical to information sharing across enterprise.
In favorable organizational environment, each part of organization contributes their part of operation chain and then information is ready available to down-stream operation or up-stream operation. A well implemented and used supply chain system is a good example. Second, important managerial complementary assets are strong senior management support for changes, incentive systems that monitor ad reward individual innovation and emphasis on teamwork and collaboration, training programs, and a management cultural that value flexibility and knowledge.
Managerial asset are key success factors for company to introduce and then effectively utilize information technology. Let’s take ERP (enterprise resource planning) systems (such as SAP and PeopleSoft), if we have a strong senior management that supports for changes, we would have better outcome on introducing new technologies especially enterprise system.
Third, social assets such as the internet and telecommunications infrastructure, IT-enriched educational programs raising labor force computer literacy, and standards (both government and private sector) provides the crucial foundation for information investments. For example, without internet telecommunication infrastructure, it is impossible for company to implement and effectively use their supply chain system across globe.