A Modeling Approach to Evaluating Strategic Uses of Information Technology.

Author List: Post, Gerald V.; Kagan, Albert; Lau, Kin-Nam;
Journal of Management Information Systems, 1995, Volume 12, Issue 2, Page 161-187.
Traditional static benefit-cost methods were useful when evaluating transaction processing systems. Strategic benefits are more difficult to evaluate, since they involve dynamic interactions between customers, suppliers, and rivals. In an attempt to gain a competitive advantage, there is a strong incentive to be the first implementor of new technology. However, information technology (IT) costs decline overtime, so there is an incentive to delay implementation. A model is developed that enables managers to evaluate this trade-off and choose the best implementation time. The model emphasizes competition between large firms in a regional (or national) market, interacting with firms in a local market. The model is illustrated with an application to the banking industry. It compares the implementation times of larger regional banks vis-à-vis smaller local banks, and shows how the banks might use technology to respond to various changes in the banking industry.
Keywords: evaluating strategic investments; game theory; strategic information systems
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List of Topics

#246 0.275 strategic benefits economic benefit potential systems technology long-term applications competitive company suggest additional companies industry operating costs difficult substantial total
#44 0.228 approach analysis application approaches new used paper methodology simulation traditional techniques systems process based using proposed method present provides various
#200 0.148 banking bank multilevel banks level individual implementation analysis resistance financial suggests modeling group large bank's services levels national data early
#242 0.131 market competition competitive network markets firms products competing competitor differentiation advantage competitors presence dominant structure share using incumbent make important
#140 0.058 model use theory technology intention information attitude acceptance behavioral behavior intentions research understanding systems continuance models planned percent attitudes predict
#170 0.056 information processing needs based lead make exchange situation examined ownership analytical improved situations changes informational examine developed receive perceptions facilitates