Idea Transcript
Information Intensity: Lets Make It More Than an Intuitive Concept
Bayard E. Wynne
Institute for Research on the Management of Information Systems Indiana University, Bloomington, IN. ABSTRACT Infofmation intensity is a concept referred to by academics in theorizing, by businessmen in decision making, and by governments in reporting and regulating. It appears to be integrally involved with strategic issues of management and economics. There is no general agreement as to how to define or operationalize "information intensity." We discuss in this paper some possibilities for developing the concept of information intensity into a communication tool for all three parties.
My selective review of literature from fields such as management, organization, change and innovation, IS and IT suggests the need for a metric. This metric would be one that shows the extent to which an organization depends on information as a driver in achieving management's goals for that organization. Such a metric would be macro in nature. Industry managers now employ surrogates for such measures in their decision making. Exploratory research in the entire field of MoIS could probably produce useful results more readily,if researchers developed measures comparable to those used by practicing managers.
The concept applies to all three levels of information technology application: for efficiency as in automation, for effectiveness as in productivity, and for innovation as in strategic management.
This article first considers the impact of IT. Then it raises the concept of "information intensity." Change, as a concomitant of growing dependence upon information is considered from several vantage points. I argue that change is the normal condition in our information age. In that context, I review information economics as a basis for suggesting some steps each of us might adopt or incorporate in some of our applied research studies.
We must mount a program of applied research which (1) generates and enables a better understanding of the issues, (2) develops a usable set of metrics for results-oriented measurement of information intensity, and ( 3 ) thereby raises the degree to which our economies benefit from the continuing innovations stemming from information technology.
Information Technology's Impact A recent report 181 by the congressional Office of Technology Assessment underscores the difficulty of relating information technology (IT) expenditures and investments to gains in profits or other organization goals. According to that same report the share of U.S. investment in plant and equipment devoted to IT doubled from 20% in 1978 to 40% in 1986. Clearly, with IT having this large and growing share of U.S. investment, we must find a way to estimate and to monitor the results from IT expenditures.
Introduction The management of information systems (MoIS) involves a variety of perspectives. These range from that of the operator of a management information system (MIS), through the developer of an evolving MIS ---including decision support systems (DSS), executive information systems (EIS) and strategic information systems (SIS) where appropriate, to the general manager of an organization. The resources involved in IS for serving business needs are already large and continue to expand as a share of organization expenditures.
At the heart of the problem is an issue of measurement. This issue surfaces in two ways. First, the industries which have invested most heavily in IT are those of a service nature. Traditionally, these banks, brokerages, insurance firms, law firms, educational, and retail or other trade organizations have not been subject to the need for large capital investments. Therefore, aside from those organizations involved in the distribution of goods, neither they nor the government's statisticians have felt any urgency to measure such investments, let alone to measure the resulting payoffs. As a result these industries, which are the growing
Information economics as a field or discipline attempts to suggest how to manage resources allocation which involve information technology (IT). Defined this way, information economics is principally a set of generic process prescriptions for use within an operating organization [lll. It is a field rich in opportunities for research. However that "view from the inside" neglects entire issues of comparison of the differential uses of IT between or among organizations.
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0073-1129/89/oooO/0123$01.000 1989 IEEE
Information Intensity: a Concept
segment of our economies in this information age, today have few solid indices of performance with which to measure payoff from investment in IT.
Set the broad field of information economics aside for the moment. Contrast the American Express Company with Schreiber Foods, Inc. The former buys, creates, merchandises and grows information. Schreiber Foods essentially buys and remanufactures or delivers processed cheese foods. The intensity of information is much higher in the output of American Express than in Schreiber.
The second, and more general, issue of measurement which surfaces has to do with the impacts which make the traditional measures of improved performance much less meaningful. For example, what is the return-on-investment for a telecommunications network or for an electronic mail system? Mere automation is no longer the issue. Instead, wholesale changes within the firm's economic conversion process for creating value-added make former standards meaningless and new standards unproven.
A number of academics introduced, at least implicitly, in their writings what I refer to as information intensity. Porter 1121, for example, uses analysis of the firm's value chain, or valueadded stream, as a key means of developing and/or appraising corporate strategy.
A second sub-group of these impacts is that which acts upon firms as a set because of the actively evolving relationships among those firms. Direct information access links production systems of separate firms in ways which produce wholly new economic processes. For example, I will raise my costs in order that you be able to drop your costs to me by even more so our joint goods are offered to my customer at a lower price than before. There is no precedent for measurement of such processes, those without antecedent, as these innovations which spring up based upon management's intuitive utilization of IT. For example, consider how long it took traditional production and inventory control managers, those who grew up with the just-in-case philosophy, to simply be able to hear the concepts underlying the just-in-time philosophy.
Porter has a footnote which is helpful in grasping the profit contribution rationale of the value chain. "Economists have characterized the firm as having a production function that defines how inputs are converted into outputs. The value chain is a theory of the firm that views the firm as being a collection of discrete but related production functions, if production functions are defined as activities. The value chain formulation focuses on how these activities create value and what determines their cost, giving the firm considerable latitude in determining how activities are configured and combined." This raises the question of what is the relative importance of various drivers of the value chain's output.
Time, or more properly the rapidity of events, identifies yet a third group of these IT impacts. Financial information about businesses is now quite changed in meaning simply because both the firm and its competitors, suppliers, etc. have access to that and most any other information about the firm and its markets so much more rapidly. Time, a major basis for all financial valuations, has been telescoped.
During the mid-eighties Porter consulted with the firm of Arthur Andersen & Co. in the planning and development of a significant new consulting practice, "Information for Competitive Advantage." Business consultants in this field want to exploit those information leverage points within the value chain which enable the systematic creation of competitive advantage. This application of the value chain in the context of Porter's associated "five forces'' framework for competitive industry analysis highlights the fact that the key competitive information levers could be quite different both by industry and by company within industry.
In this context, managements have appropriately reverted to a trio of key questions as a basis for guiding their IT investments. John Hammitt [SI of Pillsbury, Diane Wilson [161 of MIT's Center for Information Systems Research, and Ed Otting [9] of the Lilly Corporation have all said in one way or another that there are three questions which top management ought to ask and to answer in order to manage IT resources effectively for performance toward corporate goals. Those questions are:
Porter and Millar 1131 asserted that we can measure information intensity as a combination of two things. First, the firm requires a large quantity of information in order to offer its products or services to the market. They point to oil refining, in contrast with cement, as being a highly information intensive value chain. Second, they argue that the degree of information in the product itself is another dimension of information intensity. Here they cite banking, newspapers and airlines, in contrast with either oil refining or cement production. Thus, we see information intensity as a useful but complex concept.
1. How is our efficiency: are we doing the things we're doing well? 2.
How is our effectiveness: are we doing the right things?
3.
How is our fitness for future competitive actions: are we doing significant new things? These are the issues to which information economics must help provide answers or be judged inadequate. I suggest that the concept of information intensity has the potential to be developed into a metric which would enable us to deal with these three central MoIS management questions more successfully.
Cash and McLeod [ 2 ] used Porter's conceptual frame to examine the strategic dependency of business organizations upon IS technology, or IT. They concluded "Our research indicates a significant increase in the percentage of total value-added, directly dependent upon IS technology for a wide range of companies
."
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Cash and McLeod present four key questions which they feel define how strategically dependent a given company may be on information systems technology. Those questions are: "How dependent on IS technology is (the) firm to (a) improve market access, (b) provide product and company differentiation, (c) ease new product and service introductions, or (d) introduce operational efficiencies which include our major competitive thrusts for the (future)?" This view of information's leverage role in the production of value-added merely classifies separate aspects of overall information intensity.
IT/IS investment in place. IT expenditures as a percent of sales is another index occasionally used. Managers sometimes employ other surrogates such as revenue derived from IS services or employees devoted to the production of IT output. These methods can serve to differentiate among industries and among firms within industry. Yet they are very rough and incomplete, retrospective by-product measures. They are subject to all the normal shortcomings of historical accounting data, imperfect forecasts, and informed guesses. However, when used in conjunction with other criteria and in the context of a variety of planning issues to be resolved, such measures can contribute to a more considered and therefore presumably better outcome. This is particularly true when the increased communication takes place in an environment which serves to develop better group consensus.
When you take the Porter value chain idea, as extended with Millar to encompass information for competitive advantage, and as interpreted by Cash in terms of dependence upon IS technology, you arrive directly at the concept of information as a driver of the value chain, and therefore also of value-added. Information intensity is the degree to which a strategic business unit (SBU) or line-ofbusiness organization's value-added stream is a function of both information utilized and information delivered.
The Information Age Means More Dynamic Change The idea that information is a medium for, if not actually a direct cause of, organizational change has been around for a long time. EDP Analyzer '141 re-emphasized this in an issue devoted to "Increasing Organizational Effectiveness." They reflected the old but valid idea of "not just doing things right, but also doing the right things." Instead of moving on from there to the issue of strategic or even apparently catastrophic change done for competitive reasons, the editor spoke of the horrendous and oft-times hidden cost of merely doing things wrong. Using examples, EDP Analyzer cited how information systems have helped in reducing ( 1 ) errors, (2) delays, ( 3 ) unproductive activities, (4) emotional conflicts, and (5) miscommunications. One estimate of the impact of production errors is that workers spend only 10% of their time on useful output as opposed to re-work and other forms of error-based lost time.
Information Intensity; as Implemented Consider next how managers now deal with their needs to have some measure of how dependent their potential customers' organizations are upon information. Leading vendors of IT and IS, the sellers of hardware, software, and systems consulting services had to find their own ways to measure information intensity for purposes of market and sales planning. Despite imperfect measures, managers must deal with entire issues of positioning new product lines in terms of price, functionality and other dimensions. Large incremental investments in human resources, technical products, and marketing programs are being made despite the lack of non-crude information.
Tribus, in a collection of his papers on quality and productivity improvement 1151, picks up this thread of information based change processes. Keying on W. Edwards Deming's now 40 year-old development of a quality-based participative management philosophy in Japan, Tribus and his associates at MIT's Center for Advanced Engineering Study lead us to the same conclusion as did Porter and Millar, Cash and MacLeod. In addition, Tribus provides data strongly supporting the idea of the severe economic penalties of "doing things wrong."
Take the case of large systems consulting houses. Ranking their customer industries by the perceived information intensity can be very helpful. Information intensity enables leading system consulting firms to make their marketing plans, sales quotas, and staff development programs more realistic and effective. Depending upon the sophistication of the firm, several dimensions of this form of competition apply. Simply finding large markets for a given version of product or expertise is progress. If, in addition, you can segregate the more dependent, receptive customers from the "slow sells" you have even more progress.
Relying upon his years of experience as an industry executive, Tribus marshalls case study after case study, coupled with statistical comparisons to make his point. He demonstrates that viewing management as a process of sharing information so (1) people know what to do in the current process(es) and ( 2 ) people participate in the improvement of those processes leads to superior long-run competitive performance of organizations.
Estimating the spending for services in the IT arena by firms in these target industries is a first step. Historical spending levels, competitive posture improvements attained through informating [181 or creating new information of value by the way you perform current operations, and future possible business transformations which could leverage information in wholly new ways [ 6 ] are each flags for use in identifying present and potential large markets. A second level is to sort these industries and even firms by information intensity. The index or surrogate sometimes used is that of
Tribus makes this point particularly well in his paper, "The Quality Imperative in the New Economic Era," pp. 181-219 of [15]. We cannot ignore easily this corroboration of the leverage of information
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symphony or a hospital than the multi-layered business hierarchies of the seventies and eighties. His metaphor conveys the picture of a group of specialists (even virtuosi) cooperating on the basis of mutual respect, as all work directly with their leader to produce a synergistic result otherwise not attainable. He makes the point that in the future CEO's, as conductors are now, may train for leadership from the start. They would merely shift to more prestigious organizations as they demonstrated their abilities. The other side of this coin is that a leader would not necessarily have the expertise of his subordinates. In passing, it seems worth observing that these relationships, and therefore the success of the performance, are results, not authority dependent, Again, we find evidence of outcome thinking.
through the value chain for the increase of valueadded. This is especially true when it comes from such a pragmatic source and based as it is upon multiple cultures, cannot be ignored. Cash & McLeod [21 make two comments appropriate to this discussion. First (p. 13), "Double-loop learning involves making changes in the norms and standard operating procedures of an organization. In the most general sense the organization not only 'learns' to identify and to adapt to new requirements but also to anticipate them. Organizations exhibiting double-loop learning with regard to assimilating new IS technologies will allow the tecbology to lead them into entirely new functions while simultaneously using the technology to improve current practices." And on page 22, "The task of sensitive management will be to manage the changes in that world view (of when and how to incorporate new technology) caused by new technologies and to seek out those technologies that will be compatible." Finally, Wynne and Robak 1171 in a selective review of management literature, coupled with a review of over forty case studies of entrepreneurs successful in changing both major and strategic management systems, offered factoranalytic results. As they saw it (p. 19), one underlying factor in these cases was "these organizations have information networks which unconditionally pump any new, change related information throughout the organization, especially as it relates to external buyer-values and strategic competitive edges." Further "both an authority structure and a change structure exist on a decentralized basis to enable individual decision-makers to empower each other through self-policing reciprocity." Aside from the corroboration of the change aspects shared, that work finds a strong association of successful people and firms with information intensive organizations and organization processes.
Historically, Drucker sees the first major change in business organizations as having been that from owner operated to professionally managed organizations. H i s second major change was the one from professionally managed to command-and-control organizations of the Alfred Chandler mold. Drucker now sees command-and-controlmode being replaced by information-based mode organizations - - - those depending upon knowledge specialists. Holsapple and Whinston [ 6 ] have painted an extensive picture of such knowledge-based organizations. In many ways their work is particularly strong as an example of what an organization in which a lot of informating [ 7 ] takes place could resemble. Their emphasis was technically more complete and descriptive, while Drucker's was more a global portrayal emphasizing the "soft" side. However the two are consistent with one another and thus mutually reinforcing. They both call for more information intensive organizations --- but with a much more effective use of that information richness. In both versions of the "new organization," it is not simply demographics and economics but information technology which forces either change or deterioration. Drucker's view of the transformation process is instructive. He defines information to be data which are endowed with relevance and purpose provided through knowledge. Such a move from data to information causes decision processes, management structure and the actual performance of work itself to be changed. This is wholly consistent with Tribus in his discussions of the extreme ramifications of malperformance.
What we are seeing throughout these investigations and reports is that organizations are institutionalizing processes to improve upon processes. This appears to help their ability to transform the businesses competitively.
IS technology, acting to trigger significant potential changes in a host organization, is in some sense its own worst enemy. The very fact of change in (1) how to do the normal things, ( 2 ) what to do instead of the normal things, and ( 3 ) what unusual things to do to provide the value-added which we offer in the external market, both now and next year eliminates many standards of comparison on which you might readily evaluate the impact of these information based changes. Our need for a metric, such as information intensity might be,surfaces again.
The corollaries of this transformation are asserted to be (1) restructuring, (2) fewer management layers, ( 3 ) drastically reduced central service staffs, ( 4 ) dependence upon task-focused teams, and ( 5 ) increased emphasis upon individual responsibility f o r relationships and communications. According to Drucker ( p . 4 9 ) "The key to such a system is that everyone asks: Who in this organization depends upon me for what information? And on whom, in turn, do I depend? everyone in an organization should constantly be thinking through what information he or she needs to do the job and to make a contribution." This new organization is remarkably consistent with Wynne and Robak's six
The New Information Driven Change Organizations
...
Given change as a base of the future, what can we expect our organizations to evolve into? Drucker [ 3 ] has made a very plausible argument for large organizations of the future to appear more like a
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element model of an organizational framework and culture for enabling entrepreneurs.
service both creates and determines the perceived value of that product or service. From Sweeney's work we see that information intensity is useful as a characteristic of economies, as well as of products and firms.
The Holsapple and Whinston article is of particular interest because of its extensive attention to the wedding of IT and management. In describing the infrastructure and the motivations of players in knowledge-based organizations, they independently arrive at the same conclusion about individuals as do Drucker and Wynne. Through a far different logic chain, they conclude that successful inmates of the knowledge-based organization will be semiautonomous persons free to use organization resources so long as they meet a market test of increasing the collective value-added! The means for accomplishing this is, in part, to have information organized, accessible and subject to ready manipulation. Another set of experts from yet another perspective lead us to the fact that survival of organizations in a Darwinian sense will result in greater average information intensity. When practice drifts in this direction, the need the need for the metric is upon us.
Information Economics Reconsidered Thus far we have examined the impact of IT on business organizations; looked at both the academic concept of and the practitioner application of information intensity; explored the spectrum of IT driven pressures for change; identified some possible evolutionary organizational forms and cultures, given those pressures; and, seen economic evidence from another country that the health of regional economies can depend upon the presence (or absence) of open, information driven, change oriented organizations. Certainly one thing we can conclude at this point is that for an organization to adapt and succeed in this environment, it must have antennae functioning to scan that environment. Consider next a pair of authors who have described a potential design for such antennae.
An Information Society Example Examine next some findings about information flows in firms as those flows impact local or regional economies. Sweeney [14] used the specific phrase "information-intensive" in describing how firms will meet the challenges of the hformation society and the information economy. He argues that the growth of a large market of informed customers (both industrial and consumer) has shifted competition from price to non-price input factors. Those non-price factors are: technology, design, quality assurance, marketing, flexible manufacturing systems, and innovation. Each of these inputs is information-intensive. Therefore, the larger the information component's share of the end-product or service, the greater the competitiveness of the firm.
Parker and Benson have pre-published in working paper form [lo] material from their just published Prentice-Hall book, Information Economics 1111. They open their discussion with the statement "Traditional cost-benefit analysis (CBA) is no longer adequate for most applications that are innovative, or that produce or enhance revenue." These applications, in fact, are the very ones which we call strategic. These are the applications which many CIO's and their fellow top managers are now funding at the expense of both maintenance applications and the more mundane efficiency and effectiveness applications. They are doing this as a matter of management judgement in the face of the negative evaluations derived from the conventional CBA-based appraisal processes. Parker and Benson explain this seemingly anomalous behavior and then detail a generic class of processes for management's use in rationalizing their actions.
Sweeney investigated entrepreneurial vitality in growth vs., non-growth cities. His finding was that venture capitalists in non-growth cities were close and secretive. This contrasted with the sharing, open-network culture which existed among venture capitalists in the growth cities. He observes "Indeed, successful entrepreneurship reflects the superior information gained by the entrepreneur."
The techniques which Parker and Benson advocate must enable analysts to handle three categories of factors. Those categories are: (1) quantification of economic impact, (2) assessment within business domains, and ( 3 ) assessment within technical domains. The authors acknowledge that there are both lower-level and more aggregate levels at which IT resource or application decisions must be made. However, they focus most heavily on the strategic business unit or line-of-business level. And, finally the authors outline three types of IT application: (1) substitutive (comparable to automation, or efficiency); ( 2 ) complementary (comparable to informating, or productivity and effectiveness); and ( 3 ) innovative (comparable to transformative, or restructuring). Parenthetically, it is remarkable how much these three application types sound like the three questions for management cited earlier.
His summary states "The dynamic learning systems of highly interconnected small firms form an ideal structure to meet the needs and demands of the information economy, for diverse,innovative, information-intensive products. They are the cutting edge of the economy..... Therefore, any strategy for economic development should be measured by the degrees to which it (1) enhances the stock of knowledge and skills, (2) shortens the cycle time on decision information exchange, ( 3 ) enhances open sharing of information, (4) creates an autonomy of shared information, and (5) creates an entrepreneurial culture." Sweeney's message to us from his study of firms in regional economies is that the extent of information content in the product or
The authors then make a sage observation, "Informa-
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tion becomes the foundation for competition. Consequently, the basis for planning and justifying information technology projects must reflect the new value of information to the business." This is their cue to call for a move from the limited concept of (incremental) benefit to the broader concept of value --- value as the true economic impact of information technology upon the SBU ---as the basis for managing the dedication of enterprise resources among competing opportunities. An extreme example of the antithesis of this is for a firm to have refused to attempt to garner a competitive advantage because there were no offsetting clerical reductions projected. As
Parker and Benson see it, (1) change (improvements and even whole new arenas) in the business itself, ( 2 ) change in the IT infrastructure of the business, and ( 3 ) impact of the information technology upon the business' performance collectively define value. Casting these bases for value estimation against the several sets of categories enumerated earlier, the authors identify six classes of value and six classes of "risk and uncertainty."
organizations can apply the processes of information economics. They present examples of firms which are testing their methodologies with some apparent success.
Information Intensity - a Research Step for Information Economics We have seen the conceptual strength of information intensity in the frequency with which diverse authors use the idea in attempts to clarify management issues in connection with information technology. The intuitive appeal of the term for the practitioners is equally clear. Executives who have bottom line responsibility use the terms to discuss, clarify and make large resource commitments in running their basic businesses. We have also seen that the currently practiced art in conventional cost benefit analysis and return on investment does not meet the needs of management in dealing with IT issues. Most telling, perhaps,. in that arena is the need cited by Parker and Benson to link the IT proposed resource expenditure to specific business results. Note, however, that results here mean not "increase in this quarter's earnings per share" so much as it means favorable outcome in management goal(s) for the business. This means performance improvements and change in the business itself, consistent with the vision for the business.
Their book describes in detail, the specific decision procedures which they advocate. The purpose of these processes is described by two quotations from the Parker and Benson book. On page 193, "Information Economics will not change corporate culture; rather, Information Economics is a device for communicating the shared beliefs or value contained in the corporate culture. When the culture is changing, Information Economics can make clear the alternatives." Further, on page 196, "From the enterprise perspective, the application of Information Economics is within a planning and decision process. Its goals are to maximize the effect of IS on the enterprise and to make the best decision in allocation of corporate resources."
At the same time it must be noted that this linkage does not trap IT justification methodologies into the mode of being incremental to, or "piggy-backed" on, economic packages defined by other functions. IT innovations, infrastructures, and improvements both need to and must stand on their own in the context of a business purpose. This is no different from a marketing, production or finance business proposal. In fact, Parker apd Benson suggest that their process be adopted by executives outside the IT function as an improvement over present methods. This message of using a multiplicity of measures on a contingent basis depending upon the business goal and the systems level involved is presented very strongly in a new book by yet another team of combined academics and practicing executives [ l ] .
The authors assert that the processes advocated have been developed from both a theoretical and an experience base. Collectively those processes serve to: 1. develop a measure of value, 2 . develop an understanding of costs, 3 . develop an understanding of potential sources of
risk or failure, 4.
In the end, of course, it is the applied researchers in the IT and MIS fields who need the benefit of having the concept, information intensity, operationalized or made real. It is in the end, the questions which we ask in our research which will be most telling about whether or not information intensity might be useful to the field of information economics.
and, perhaps most important, create consensus within and among management groups by surfacing both: 0
business feasibility; value & effect on performance,
0
and, technical viability; essentially risk analysis.
For example, we are all familiar with the charts which show on an industry by industry basis the percent of IT expenditures for each member company over the years. An amazing (if somewhat biased) observation has been made that it is the better companies in each industry which show the highest cost trace lines. If true, that might be a sad commentary. The prevalence of the thought suggests that we do research of this "excellence" nature in
We can draw two immediate messages from this view of the book. First, current CBA and return-oninvestment expenditure appraisal tools are grossly inadequate for guiding the management of IT resources as a key component of the business or organization. Second, managements of individual
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order to find wnar the associaLion intensity and excellence is.
ur
References
information
If, as suggested elsewhere, product, value chain, and industry (or firm) each have a dimension or aspect of information intensity to them, then we need to ask what the nature of the contingency relationships are. Can we ferret them out as the basis for building a theory?
[ll
Berger, P., J.G. Kobelius and D.B. Sutherland (editors), Measuring Business Value of Information Technologies, ICIT Press, International Center for Information Technologies, Washington D. C., 1988.
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Cash, J.I., Jr. and P.L. McLeod, "Managing the Introduction of Information Systems Technology in Strategically Dependent Companies," Journal of Management Information Systems. volume 1, Number 4 , (Spring 19851, pp. 5-23.
Summary The U.S. Government, top industry executives, both in and outside of the IT functional management area, and IT applied researchers have all acknowledged one or more aspects of the IT measurement problems. Across all three sets of concerned people, there is agreement that we face a particularly difficult issue in attempting to estimate in advance or to measure concurrently the impacts of the introduction of IT into an SBU, a business firm or other organization, an industry, or an economy.
Drucker, Peter F., "The Coming of the New Organization," Harvard Business Review January-February 1988, pp. 45-53. "Increasing Organizational Effectiveness," EDp Analyzer, Volume 24, Number 7, July 1986. Hammitt, John M., "Making It All Work," Information Systems; The New Business Partner 1988 Institutional Member Conference, The Society for Information Management, Tarpon Springs, FL, March 11, 1988.
Information economics appears to offer a pragmatic approach at the micro level for the managements of individual organizations. However, where more macro level needs exist, such as in governmental and research studies, information economics is not yet nearly as useful.
Holsapple, C.W. and A.B. Whinston, "KnowledgeBased Organizations," The Information Society, Volume 5, Number 2, 1987, pp. 77-90.
Information intensity appears from the literature to be a potentially useful concept to use in attacking this measurement problem. We have seen that: (1) it has face validity, ( 2 ) is used in operaring business decisions, and ( 3 ) it ought to be testable in a variety of research settings. The opportunity for joint industrial-academic efforts to overcome this measurement problem seems timely (ripe) and worth pursuing. A team effort probably would result in pragmatic, but technically sound, action-oriented research. Usable results could be expected with a reasonable cooperative effort.
Kanter, R.M., The Changemasters: Innovation and Entrepreneurship in the American Corporation, Simon & Schuster, Inc. NY, 1984. Office of Technology Assessment, Technology and the American Economic Transition: Choices for the Future, U.S. Government Printing Office, 1988.
[9]
Otting, E.A., Meeting of the Indiana University MIS Affiliates Program, June 2, 1988.
[lo] Parker, M.M.
and R.J. Benson, "Information Economics: an Introduction," Working Paper Series, Center for the Study of Data Processing, Washington University, St. Louis, MO, 1987.
One high potential way to approach this would be to work with the membership of the Society for Information Management. They, as partners with an academic research Institute, could provide both financial resources and managerial participants for the research. A second possible way to activate an attack upon this problem would be to have a vendor such as IBM, DEC. McCormick & Dodge, or Peat Marwick fund one or a few of the leading MIS research institutes on a jointly defined research program. A third possibility would be to seek a grant from the National Science Foundation for a University associated researcher to lead an effort as described above.
[ll] Parker, M.M. and R.J. Benson, Information Economics: Linking Business Performance to Information Technology, Prentice-Hall, Englewood Cliffs, NJ 1988. [12] Porter, M.E., Competitive AdvantaRe: Creating and Sustaining Superior Performance, MacMillan, Inc., NY, 1985.
However it proceeds, it is clear that research such as that described in this paper should be done. We have, in this issue, a truly significant problem in the management of information systems. We should mount an applied research program to (1) understand the issues better, (2) build a usable information intensity metric(s), and ( 3 ) to enable our economy to benefit more fully from the business and organizational innovations, past, present and future, which flow from developments in information technology.
[13] Porter, M.E. and V.E. Millar, "How Information Gives You Competitive Advantage,'' Harvard Business Review, July-August 1985, pp. 149-160.
[14] Sweeney, G.P., "The Entrepreneurial Firm as a Learning System in the Information Economy," The Information Society, Volume 5, Number 2, 1987, pp. 91-100.
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[15]
Tribus, M., Selected Papers on "Quality and Productivity Improvement", National Society for Professional Engineers, publ. 111459, Washington D.C., March 1988.
[ 1 6 ] Wilson,
D.D., "Assessing I.T. Performance: What the Experts Say," The Management Forum on Information Technology, Indianapolis, IN, May 12, 1988.
[17]
Wynne, B.E. and N.J. Robak, "Entrepreneurs Enabled: an Integration and Application of Contemporary Management Theory," WorkinR Paper Series M 0 5 , Institute for Research on the Management of Information Systems, Bloomington, IN, May, 1988.
[ 1 8 ] Zuboff, S.,
In the Age of the Smart Machine: The Future of Work and Power, Basic Books, Inc., 1988.