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TECHNOLOGY INVESTMENT (technology + investment)

Distribution by Scientific Domains

Humanities and Social Sciences	50%

Selected Abstracts

TECHNOLOGY INVESTMENT IN POLLUTION CONTROL IN SUB-SAHARAN AFRICA: EVIDENCE FROM NIGERIAN MANUFACTURING

THE DEVELOPING ECONOMIES, Issue 4 2001
John Olatunji ADEOTI
First page of article [source]

Economic Evaluation of Scale Dependent Technology Investments

PRODUCTION AND OPERATIONS MANAGEMENT, Issue 1 2005
Phillip J. Lederer
We study the effect of financial risk on the economic evaluation of a project with capacity decisions. Capacity decisions have an important effect on the project,s value through the up-front investment, the associated operating cost, and constraints on output. However, increased scale also affects the financial risk of the project through its effect on the operating leverage of the investment. Although it has long been recognized in the finance literature that operating leverage affects project risk, this result has not been incorporated in the operations management literature when evaluating projects. We study the decision problem of a firm that must choose project scale. Future cash flow uncertainty is introduced by uncertain future market prices. The firm's capacity decision affects the firm's potential sales, its expected price for output, and its costs. We study the firm's profit maximizing scale decision using the CAPM model for risk adjustment. Our results include that project risk, as measured by the required rate of return, is related to the inverse of the expected profit per unit sold. We also show that project risk is related to the scale choice. In contrast, in traditional discounted cash flow analysis (DCF), a fixed prescribed rate is used to evaluate the project and choose its scale. When a fixed rate is used with DCF, a manager will ignore the effect of scale on risk and choose suboptimal capacity that reduces project value. S/he will also misestimate project value. Use of DCF for choosing scale is studied for two special cases. It is shown that if the manager is directed to use a prescribed discount rate that induces the optimal scale decision, then the manager will greatly undervalue the project. In contrast, if the discount rate is set to the risk of the optimally-scaled project, the manager will undersize the project by a small amount, and slightly undervalue the project with the economic impact of the error being small. These results underline the importance of understanding the source of financial risk in projects where risk is endogenous to the project design. [source]

Implementation never ends! the postimplementation organizational and operational implications of ERP

NEW DIRECTIONS FOR HIGHER EDUCATION, Issue 136 2006
Philip J. Goldstein
Planning for the ongoing support and maintenance that accompany implementation of new enterprise resource planning systems may be more essential to realizing benefit from a technology investment than choosing the product with the most features. [source]

Measuring profitability impacts of information technology: Use of risk adjusted measures

PROCEEDINGS OF THE AMERICAN SOCIETY FOR INFORMATION SCIENCE & TECHNOLOGY (ELECTRONIC), Issue 1 2003
Anil Singh
This study focuses on understanding how investments in information technology are reflected in the income statements and balance sheets of firms. Today, little doubt exists that information technology is being used by organizations in a wide variety of settings and ways and that information technology is critical for the smooth operation of many organizations. Further, a strong body of research exists showing that information technology usage is positively correlated with organizational productivity. However, empirical evidence of information technology contributing to corporate profitability has not been forthcoming. Although the income statements, balance sheets, and cash-flow statements all together summarize the financial structure, health and profitability of firms but still much doubt and confusion exists over the impacts of information technology usage on a firm's "hard" numbers such as revenues, cost, profit margins, or financial ratios and structure. So far, only a few studies have found a significant positive relationship between information technology and some aspect of corporate profitability. The present research argues that the inability of earlier studies to identify the relationship between information technology investments and bottom-line performance is in part because of methodological reasons. This study first defines and develops risk-adjusted measures of corporate profitability. Then, it examines the income statements and balance sheets of more than 500 firms that are leading users of information technology for the period 1988-98. Finally, the study shows that the relationship between information technology investments and corporate profitability is much better explained by using risk-adjusted measures of corporate profitability than using the same measures of corporate profitability but unadjusted for risk. [source]