- Home
Documents
- Benchmarking for the Digital Organization Erik Brynjolfsson, Xiaoquan (Michael) Zhang and Shinkyu...
36
Benchmarking for the Digital Organization Erik Brynjolfsson, Xiaoquan (Michael) Zhang and Shinkyu Yang Center for eBusiness MIT November 2004
Benchmarking for the Digital Organization Erik Brynjolfsson, Xiaoquan (Michael) Zhang and Shinkyu Yang Center for eBusiness MIT November 2004
Embed Size (px)
Citation preview
Center for eBusiness@MIT and Shinkyu Yang
Center for eBusiness
Productivity Paradox
“We see the computer age everywhere, except in the productivity
statistics”
-- Bob Solow, 1987
Copyright © 2004 Erik Brynjolfsson
3.2346153846
4.6
3.2346153846
2.3
3.2346153846
8.2
3.2346153846
2.9
3.2346153846
3
3.2346153846
3.6
3.2346153846
2.2
3.2346153846
4
3.2346153846
0.1
3.2346153846
3.1
3.2346153846
2.8
3.2346153846
4
3.2346153846
1.8
3.2346153846
3.7
3.2346153846
4.5
3.2346153846
3.9
3.2346153846
3.4
3.2346153846
3.5
3.2346153846
4.1
3.2346153846
2.2
3.2346153846
3.1
3.2346153846
0.5
3.2346153846
2
3.2346153846
4.3
3.2346153846
3.2
3.2346153846
3.1
1.4681818182
-1.7
1.4681818182
3.5
1.4681818182
3.5
1.4681818182
1.7
1.4681818182
1.1
1.4681818182
-0.1
1.4681818182
-0.3
1.4681818182
1.9
1.4681818182
-0.3
1.4681818182
3.5
1.4681818182
2.8
1.4681818182
2
1.4681818182
3
1.4681818182
0.5
1.4681818182
1.5
1.4681818182
1
1.4681818182
1.5
1.4681818182
1.1
1.4681818182
3.8
1.4681818182
0.5
1.4681818182
1.2
1.4681818182
0.6
2.5
2.7
2.5
2.2
2.5
2.6
2.5
2.5
3.9325
3.1
3.9325
2
3.9325
5.3
3.9325
5.33
Sheet3
-Erik Brynjolfsson
Executive Recruiting Case
Productivity
Move from analog to digital business processes
Open information access
Empower the employees
Copyright © 2004 Erik Brynjolfsson
Copyright © 2004 Erik Brynjolfsson
With the following attributes:
Providing actionable advice
Accessible from anywhere
Copyright © 2004 Erik Brynjolfsson
400 large firms
New wave of data gathering underway
-- Data from public sources
National Income and Product Account from Bureau of Economic
Analysis
Productivity Statistics from Bureau of Labor Statistics
-- Data from private sources
Harte-Hanks data: IT capital (~1000 firms)
IDC data: IT expenditure (~500 firms)
Copyright © 2004 Erik Brynjolfsson
New data recorded in a survey table
Each new survey linked to a user, who is then linked to a
company
Companies categorized by SIC2 code
The complexity arises because the number of companies in each
category is not uniform
So for each SIC2 code, we create two databases, one for
manufacturing firms, one for the other firms
…See the next two slides
Copyright © 2004 Erik Brynjolfsson
Copyright © 2004 Erik Brynjolfsson
Straight-forward Comparison of Data
Copyright © 2004 Erik Brynjolfsson
Copyright © 2004 Erik Brynjolfsson
1. Build Digital Processes
Embedding standard procedures in technology allows employees (and
customers!) to work with less supervision
Versatile use of technology supports a richer set of communication
channels: using the Web allows customers (and employees) to
“self-serve,” reducing costs
Copyright © 2004 Erik Brynjolfsson
Copyright © 2004 Erik Brynjolfsson
“on the Net” at Cisco
Source: Woerner, S. “Networked at Cisco” Center for eBusiness Case
Study
http://ebusiness.mit.edu/education/cases/cisco/CiscoCase3.pdf
Copyright © 2004 Erik Brynjolfsson
2. Open Information Access
Access to information both vertically and horizontally helps an
organization:
Vertical information provides managers with a “dashboard” to keep
their finger on the pulse of an organization
Horizontal information allows frontline employees to access more
information from outside their department
Copyright © 2004 Erik Brynjolfsson
Throughout the organization, encourage free access to internal and
external information
Use technology to foster lateral communication and coordinate among
employees
Use technology to foster vertical communication between employees
and their managers
Do not put restrictions on Internet access for employees
Copyright © 2004 Erik Brynjolfsson
The 'first law of scientific management'
“It is necessary in any activity to have a complete knowledge of
what is to be done and to prepare instructions … the laborer has
only to follow instructions. He need not stop to think."
-- Meyers, 1914
WalMart “empowers” workers with more decision rights
Both firms are using more network technology over time
Both firms are shifting more decision rights to workers
Sites at each firm with more network technology are also more
likely to empower workers with decision rights
WalMart is maintaining its lead in technology, employee empowerment
and, most importantly, performance.
Copyright © 2004 Erik Brynjolfsson
4. Strong Performance-linked Incentives
More incentive pay, linked to individual performance
Somewhat more likely to use stock options for a broader set of
employees
Copyright © 2004 Erik Brynjolfsson
Actively invest in promoting culture
Copyright © 2004 Erik Brynjolfsson
More executives involved in recruiting
More likely to hire new employees on a variety of criteria
including: education, analytical skills, computer skills
Somewhat more likely to screen for interpersonal skills and for fit
with the corporate culture
Copyright © 2004 Erik Brynjolfsson
“Human Capital”
Provide training for a larger percentage of employees once they are
hired
Do more online training
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
-4
-2
0
2
4
M
FP
IT3
Professors Dimitris Bertsimas and Georgia Perakis
Platform Technologies and Leadership Strategies in the
Internet Economy
Professor Chrysanthos Dellarocas
Dynamic Pricing to Improve Supply Chain Performance
Professor David Simchi
Professor Lawrence Wein
Professor Roy Welsch and Dr. Alexander Samarov
January 2001 Awards
Individual and Corporate Performance
-
Professor Benjamin Grosof
Professors John Hauser, John Little, and Duncan Simester
e
Dr. Rob Laubacher and Professor Thom
as Malone
eBusiness
on the Web
Professors Drazen Prelec
nomics
Professor Nader Tavassoli