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Part 2  Strategy and applications

The productivity paradox

All discussion of investment appraisals in information systems should acknowledge the 

existence of the 

productivity paradox

. Studies in the late 1980s and 1990s summarised by 

Brynjolfsson (1993) and Strassman (1997) suggested that there is little or no correlation 

Decisions about which business applications to invest in

A portfolio analysis such as that illustrated for a B2B company in Figure 5.7 can also be used 

to decide priorities for application by selecting those that fall within the strategic and turna-

round categories for further investment. Relative priorities and the amount of investment 

in different applications can also be assisted if priorities for digital business objectives have 

been assigned, as is the case with Table 5.4.

Traditionally investments in information systems have been categorised according to their 

importance and contribution to the organisation. For example, Robson (1997) describes four 

types of BIS investment: