Chapter Four

This chapter told us that translating the benefits of information technology into productivity measures is very difficult because information technology now is so complex, and the measures could not explain when technology is used in an innovation fashion. However, we might use traditional measures, such as a high percentage of the productivity created to IT is attributed to its production and sales. However, this way can not show the quality of operations in the companies, the timeliness, and innovation and how convenient is in the customer-service. Another surprised thing is that technology makes many of labors work longer than before because there is a poor training for using new technology in the companies, and the quality of the works is very low and the rework showed up. Finally, in the end of the chapter, it provided the survival guide for buyers. In the guide, I like one of the steps is that do not following meaningless spending because in the spending measures, the buyer only know how much companies spend, not how well they use they used the technology. People usually think that when they spent more money, they will get more productivity. That is totally wrong. Any productivity gain is dependent on how will the technology is used. Thus, when companies want to get new systems or technology for their operation, they must know if this investment is valuable. If not, just keep systems functioning are a better and less risky and cost way than get new systems. For example, most of ERP systems are very expensive. Even though, they have very powerful functions for operating in the companies, but some of companies just need some of functions in ERP systems, not all of the functions, to help their business can be operated efficiently. Thus, they do not need to spend such much money implementing the whole ERP systems.

Chaper Three

In this chapter, I saw a lot of disturbing stories of IT spending, and these stories would help managements, who are buyers and sellers, to realize the relationship between their business and costs of their technology. For example, buyers should understand that sellers may have the different interests in their mind or may have their best interests in their mind. The buyers can use references to analyzing what kinds of systems or software functions the previous sellers want, and they will realize what software functions they really need. If sellers did not provide reference, it would be considered risky. Another important thing is the costs of associated failures. Because when new technologies were implemented in the companies, the management did not really know about the cost and the benefits of implementing the new technologies. Thus, the forecasts by the employee with financial expertise are very important. Thus, the book mentioned the sensitivity analysis. Using the sensitivity analysis can let the managements know how to compute the potential benefits and losses of the new technology for the best worst, and probable scenario. Thus, the management would know the risks of implementing the new technologies. Finally, this chapter also provided the survival guide for buyers and sellers. This guideline is very useful for the managements because the managements can take this guideline to consider what costs or risks are in the new technologies when the new technologies are brought in the companies. This guideline also gives the comment sense for management before attempting to implement large, complex projects. Thus, I suggest that the managements who are implementing the new technology should study and understand the top 10 corporate information technology failures, and then the managements would have better sense for the risks and costs of implementing the new technology in the companies.

Chaper Two

In this chapter, it just told us the history about IT spending over the year and IT’s dramatic increase and growth. For example, in 1950, there were about 20 automatic calculators and computers in the United States with a total value of around $1 million. However, in 2001, corporate information technology spending reached nearly 50 percent of all capitalized goods. Thus, during this period, many of companies invested heavily in new systems and software. So they created a trend as irrational exuberance. This way caused some problems. For example, if a company wanted to install the ERP system, they would have to identify what the business needs, to analyze the cost versus benefits and the risk of failure, and to make sure that implementing the ERP system after achieving some degrees of changes happened. Thus, the companies should look at the successes and failures cases with the new systems and avoid untested products, and make a good invest in time. Even though, companies who are first to adopt a new technology or systems successfully usually get more competitive advantage and leadership in their business position; they also have to take the responsibility the big risk of failure. That is a very dangerous situation. However, if the companies just adopt the slow moving and minimal spending, they would never be a leadership in their business area and might lost the market. Thus I think that the companies should ask themselves whether they have enough ability for being the first to adopt a new technology. If not, do not take the heavy responsibility in this dangerous situation.
However, in fact, the IT spending has changed because the price of technology products which include the hardware and software has already reduced. The companies can get the cheaper price but better performance for the technology products. Thus, the companies have more options to make the best decision for developing their new technology in their companies.

Chaper One

Companies thought that they should spend much money for using technology to improve business. However, there are some examples to prove that just spending the money for improving the technology in the companies is wrong. For examples, the collapse of Internet dot.com and IT-driven corporations had done the wrong approach for just improving their technology in their companies. Companies should not only improving their technology but also focus on how to use technology for improving their business in the companies.
This chapter also addresses the rise and fall of technology, such as ERP system is increasing very fast because this kind of system has very powerful competitive advantage for every area of entire companies.
In the past years, we had no doubts about that technology plays an extensive role in the business everyday. However, the same issue was that the companies spent a lot of money on IT but they did not get more benefits to cover the costs in their IT improvement. The top managements in these companies should ask themselves about what the reason they could not make profits in their IT improvement.
In my opinion, the answer was that the companies did not know how to use the new technology to make money because they did not know how to make a good strategy for using the new technology or their employees and customers did not know how to use this technology and did not know how convenient this technology was used. The other thing was that the companies could choose the cheaper and simpler technology than the complicated technology systems. Doing this way could benefit more for the companies because people get a new thing and then they want this new thing can be easily used and understood.
Anyway, the companies should think about spending less and getting more in their IT.