Assuring Reliable and Secure IT Services Security, backup, recovery etc. No Very detailed discussion of the technology (e.g. security management), but not much on how technology enables innovation
Determining whether investments in information technology (IT) have an impact on firm performance has been and continues to be a major problem for information systems researchers and practitioners. Financial theory suggests that managers should make investment decisions that maximize the value of the firm. Using event-study methodology, we provide empirical evidence on the effect of announcements of IT investments on the market value of the firm for a sample of 97 IT investments from the finance and manufacturing industries from 1981 to 1988. Over the announcement period, we find no excess returns for either the full sample or for any one of the industry subsamples. However, cross-sectional analysis reveals that the market reacts differently to announcements of innovative IT investments than to followup, or noninnovative investments in IT. Innovative IT investments increase firm value, while noninnovative investments do not. Furthermore, the market's reaction to announcements of innovative and noninnovative IT investments is independent of industry classification. These results indicate that, on average, IT investments are zero net present value (NPV) investments; they are worth as much as they cost. Innovative IT investments, however, increase the value of the firm.
Innovative information technology (IT) applications are risky investments. Unless successful applications provide innovators with exceptional returns, these investments would not be justified. Other than a few case studies, there is no evidence that the first movers of successful IT applications are rewarded for the risks they bear. We present the results of an extensive longitudinal study of the effects of early adoption of automated teller machines (ATMs) by banks, on market share and income. The study spans the period from 1971 to 1983 and includes 2,534 banks from across the United States. Results indicate that the earliest adopters (1971 through 1973) were able to increase market share, with market share gains being sustained for a long time. Banks that adopted ATMs between 1974 and 1979, however, did not gain market share. The results also indicate that early ATM adoption enabled banks to increase income and income gains were sustained for a long time. These findings support case study evidence that early adoption of new IT applications can lead to long-term competitive advantages for firms.
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