Returns on IT Investment
• Investing in information technology does not guarantee
good returns
• Considerable variation in the returns firms receive from
systems investments
• Factors:
– Adopting the right business model
– Investing in complementary assets (organizational and
management capital)
Complementary Assets
• Complementary assets:
– Assets required to derive value from a primary investment
– Firms supporting technology investments with investment in complementary assets receive superior returns
– E.g.: invest in technology and the people to make it work properly
• Complementary assets include:
– Organizational investments, e.g.
• Appropriate business model
• Efficient business processes
– Managerial investments, e.g.
• Incentives for management innovation
• Teamwork and collaborative work environments
– Technology investments, e.g.
• The Internet and telecommunications infrastructure
• Technology standards