Chapter 7: Summary book

Question 1

What about the productivity paradox?

Answer 1

In 1991, Erik Brynjolfsson wrote an article entitled “The Productivity Paradox of Information Technology: Review and Assessment”. He reviews studies about the impact of IT investment on productivity and could conclude that the addition of information technology to business had not improved productivity, hence the productivity paradox.

Question 2

What were the 4 categories of the productivity paradox

Answer 2

• Mismeasurement of outputs and inputs,
• Lags due to learning and adjustment,
• Redistribution and dissipation of profits,
• Mismanagement of information and technology.

Question 3

What thinks Nicholas Carr about IT?

Answer 3

• Information technology has become more ubiquitous, it has also become less of a differentiator.
• Since IT is essentially a commodity, it should be managed like one: low cost, low risk. Using the analogy of electricity, Carrdescribes how a firm should never be the first to try a new technology, thereby letting others take the risks. IT management should see themselves as a utility within the company and work to keep costs down. For IT, providing the best service with minimal downtime is the goal.
• Although the provocative title suggests otherwise, Carrdoes not say that IT is not important. He considers it to be essential nowadays.