Kenneth C. Laudon
Department of Information Systems
Stern School of Business
New York University
klaudon@stern.nyu.edu

ABSTRACT: to be furnished

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Edited by:
Tomas Isakowitz
Department of Information Systems
Stern School of Business
New York University
tisakowi@stern.nyu.edu

Manfred Thuring
Department Empirica Communications and Technology Research

December 1994

ABSTRACT: The articles in this collection address the issues of hypermedia design. They were presented first at the First International Workshop on Hypermedia Evaluation and Design organized in Edinburgh in September of 1994, in combination with the European Conference on Hypermedia Technologies (ECHT-94).

Hypermedia design for commercial purposes, e.g., technical documentation, catalogues, encyclopedias and training manuals, is a taxing task that usually results in large and complex applications. These applications must be of high quality and easy to maintain. Moreover, their development must be timely and often has to be accomplished with limited resources. As a consequence of the current lack of development methodologies for designing such applications, hypermedia development projects are unduly lengthy and hard to manage, frequently producing systems that are also difficult to handle and to maintain.

These problems arise from at least three particularities of hypermedia design. First, there are many different components involved, such as user-interface, navigation, database store and content preparation. Second, there are no conceptual frameworks to the process because more traditional data models, e.g., data flow diagrams, E-R diagrams, flowcharts as well as object-oriented hierarchies, are insufficient or even inappropriate. Third, the synergy among the various aspects of a hypermedia application stretches the boundaries of commonly established roles for software developers.

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Kenneth Laudon
Department of Information Systems
klaudon@stern.nyu.edu

William H. Starbuck
Department of Management
wstarbuc@stern.nyu.edu

Stern School of Business
New York University

December 1994

ABSTRACT: Through the world, economies have been putting more and more emphasis on service industries, and especially on information work. This article surveys the types of information work, of information workers, and of computer systems to support information work. It then examines -- knowledge-intensive firms (KIFs) -- the organizations that depend most strongly on knowledge and information work. KIFs try to convert knowledge into capital, but they generally have precarious bases for success.

The research reported in this working paper was supported by a grant from the National Science Foundation, Division of Information, Robotics, and Intelligence Systems (NSF #IRI 8619301), 1986-1990.

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Kenneth Laudon
Department of Information Systems
Stern School of Business
New York University
klaudon@stern.nyu.edu

Spring 1992, revised January 1995

ABSTRACT: Very Large Scale Systems (VLSS) play a powerful role in shaping what an organization does and can do in a practical sense. VLSS are deeply embedded in the organizational procedures, business plans, and strategies. These systems evolve over long periods of time, often not according to some rational plan, and for a limited time they provide a significant competitive advantage over other firms. In the long run, however, VLSS become strategic liabilities and must be rebuilt.

Many organizations experience great difficulty rebuilding VLSS. Indeed, most organizations attempt to avoid rebuilding VLSS until the last possible moment. Often, the organization is in a state of crisis, a strategic transition. Because of the complexity and size of VLSS, existing methodologies often are not helpful. To make matters worse, the typical management incentive structure discourages rebuilding VLSS.

In a typical VLSS effort, participants soon discover that they must rebuilt the organization in order to take full advantage of new technologies. A major organizational engineering effort is often required. Senior management as well as systems management routinely underestimate the complexity of the task before them. Consequently, large errors are made in estimating costs and time.

Drawing on research in both the private and public sector, this paper examines how VLSS fail, why VLSS are so difficult to rebuild, what are the strategy options, and how can senior management guide the rebuilding process.

This research was supported by the Office of Technology Assessment, US Congress, from 1978-1982, 1985-1986, and the National Science Foundation, Information and Technology Program, Division of Information, Robotics, and Intelligent Systems, Grant #IRI-8619301, from 1986-1989.

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Mark S. Silver
Department of Information Systems
Stern School of Business
New York University
msilver@stern.nyu.edu

M. Lynne Markus
Information Science
Claremont Graduate School

Cynthia Mathis Beath
Cox School of Business
Southern Methodist University

ABSTRACT: This paper presents a teaching model we have used successfully in the MBA core course in Information Systems at several universities. The model is referred to as the "Information Technology Interaction Model" because it maintains that the consequences of information systems in organizations follow largely from the interaction of the technology with the organization and its environment. The model serves a number of pedagogical purposes: to integrate the various course components, to provide a formal foundation for the course content, to foster practical analytical skills, and to provide a framework for case discussions and student projects. Moreover, the model is intended to acquaint students with the dynamics of information systems in organizations and to help them recognize the benefits, dangers, and limitations of these systems. The paper includes a discussion and examples of how the model can be used for proactive and reactive analyses, and it concludes with an assessment of the model's effectiveness in the core course.

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Department of Information Systems
Stern School of Business
New York University
akambil@stern.nyu.edu, jturner@stern.nyu.edu

March 1994

ABSTRACT: Outsourcing of services is usually viewed as a way to increase or decrease capacity at the margin. By OUTSOURCING a firm can vary its ability to provide goods or services such as information technology (IT) processing capacity or applications development, without taking on the long term commitment of permanent staff or equipment.

Today, outsourcing provides new options for managers to provide information technology infrastructures and services to a firm. In this paper we identify ways in which outsourcing may be used tactically to better align business and information technology strategies.

Specifically, we consider how selective outsourcing enables alignment of incentives, business revenues and IT infrastructure costs, and how organizational intent can be made more consistent with firm's capabilities. We propose that outsourcing as an information systems management strategy can enable better control and lower agency costs as managers benefit from better information through external benchmarking. We also consider the role of outsourcing as a vehicle to support major organizational transformation, and as a device for enabling new models of organization. Based on our analysis we propose a series of testable propositions about outsourcing.

The contributions of this paper include extension of business strategy and information technology alignment concepts to incorporate the interdependence between projects, product life cycles and technology transfer. More importantly, the paper highlights new directions for outsourcing research, focusing on the effects of outsourcing on the IT organization, the processes of internal technology development, and the transfer of technologies between organizations.

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Department of Information Systems
Stern School of Business
New York University
e-mail:kduliba@stern.nyu.edu, hlucas@stern.nyu.edu

ABSTRACT: Since 1976 airlines have installed computerized reservations systems (CRSs) in travel agencies. A "halo effect" occurs when an agent favors the CRS vendor over other airlines in making reservations. This effect should be seen in the vendor airline's market share between cities and in the overall performance of the airline at a national level. This paper presents models of the impact of the halo effect on selected city-pairs and on overall airline performance. The city-pair analysis employs a multinominal logit market share model using five years of data on 72 routes. The national model uses longitudinal data for a panel of ten airlines for twelve years. The results of both analyses suggest the existence of a halo effect. It is likely that strong airlines developed and deployed CRSs to travel agencies, strengthening their positions in the industry. The results provide evidence of a significant return to the CRS vendor airlines from their investment in information technology.

KEYWORDS: Agency automation, airline performance, business value of IT, computerized reservation systems, CRS, corporate strategy, halo effect, market share models, travel agencies.

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Bruce W. Weber
Department of Information Systems
Stern School of Business
New York University
e-mail:bweber@stern.nyu.edu

ABSTRACT: The growth of alternative trading systems that compete with established stock markets will have profound effects on many securities exchanges and their member firms. New screen-based markets can match buy and sell orders, and confirm trades electronically to the participants. In many cases, investors' orders meet directly in the system without the involvement of a broker or a dealer, saving intermediation costs such as the bid-ask spread and broker commission costs. Competing market makers operating on the London Stock Exchange's SEAQ market system provide an intermediated, "quote driven" trading mechanism. Nearly all equities trading in London today occurs through SEAQ, but the approaching roll-out of several alternative trading systems will provide investors with new opportunities to trade without market makers. A simulation model of order arrival, information change, and trading in a competing dealer market based on the London Stock Exchange is used to examine the consequences of disintermediated trading systems. The results indicate that trading by market makers at their discretion at "midspread" prices leads to a significant reduction in dealing margins. In two other scenarios, the operation of an alternative, disintermediated order crossing mechanism, reduces market makers' trading volumes and lowers the level of intermediation at some savings to investors. Alternative trading systems reduce transactions costs borne by some traders, but those requiring immediate execution and dealer intermediation may pay more.

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Kenneth C. Laudon
Department of Information Systems
Stern School of Business
New York University
e-mail:klaudon@stern.nyu.edu

Kenneth L. Marr
Hofstra University
Hempstead, New York

March 1994

ABSTRACT: This paper reports the puzzling results of a study which examined IT capital investment and productivity at three of the largest IT user sites in the U.S. for the period 1970-1990: Social Security Administration (SSA), Internal Revenue Service (IRS), and the Federal Bureau of Investigation (FBI). Based on detailed IT investment, employment, and output data over twenty years, we found that only one agency had achieved significant productivity benefits, a second agency had modest results, and a third agency achieved no results whatever. These results cannot be explained by traditional theories of productivity of how productivity is produced. We argue that IT-induced productivity results not simply from strategic choice, nor the operation of the invisible hand in the market place, nor simply from keen managers adjusting their organizations to an "objective" environment. Instead we propose instead a new theory in which productivity benefits derive from a larger macro-culture enacted by powerful institutions in an organizational field. We extend this analysis to the larger economy and examine how this new theory helps us understand recent claims that IT is finally having positive productivity benefits at the sector level, and also helps us understand how the current fascination with reengineering and downsizing may be a self-fulfilling prophecy.

The research reported here was supported by a grant from the National Science Foundation, Division of Information, Robotics, and Intelligent Systems (NSF #IRI 861-9301), 1986-1990.

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