Technology investments have not paid off in corporate profits(bits.blogs.nytimes.com)
bits.blogs.nytimes.com
Technology investments have not paid off in corporate profits
http://bits.blogs.nytimes.com/2009/06/19/tech-payoff-for-companies-remains-elusive-study-finds/
5 comments
OK, so maybe I've not understood the point. But isn't one of the biggest goals of technology to increase productivity? And how can tech be separated from productivity increase?
There used to be a joke in economics: "computers are showing up everywhere, except for the productivity statistics".
This article says that since 1965 the return on assets for US corporations has dropped by 75% while the biggest additions to the asset base over the same period have been hardware and software. The first question this seems to raise is what are we actually measuring when we look at return on assets - does it take into account the fact that your customers view your brand more positively because your IT has made your company more responsive to the customer? Because that change could actually reduce your advertising costs and not end up in any metric. And the second question is whether most companies are just investing in technology to automate existing processes or are really reorganizing the way they do business around their IT so that they can fully leverage all of the potential benefits of their IT. Of course that takes a degree of understanding of IT that many older executives simply do not have.
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