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.