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Abstract:
In an effort to reveal the fine-grained relationships between IT use, patterns of information flows, and individual information-worker productivity, we study task level practices at a midsize executive recruiting firm. We analyze both project-level and individual-level performance using: (1) detailed accounting data on revenues, compensation, project completion rates, and team membership for over 1300 projects spanning 5 years, (2) direct observation of over 125,000 email messages over a period of 10 months by individual workers, and (3) data on a matched set of the same workers' self-reported IT skills, IT use and information sharing. These detailed data permit us to econometrically evaluate a multistage model of production and interaction activities at the firm, and to analyze the relationships among key technologies, work practices, and output. We find that (a) IT use is positively correlated with non-linear drivers of productivity; (b) the structure and size of workers' communication networks are highly correlated with performance; (c) an inverted-U shaped relationship exists between multitasking and productivity such that, beyond an optimum, more multitasking is associated with declining project completion rates and revenue generation; and (d) asynchronous information seeking such as email and database use promotes multitasking while synchronous information seeking over the phone shows a negative correlation. Overall, these data show statistically significant relationships among technology use, social networks, completed projects, and revenues for project-based information workers. Results are consistent with simple models of queuing and multitasking and these methods can be replicated in other settings, suggesting new frontiers for IT value and social network research.

Abstract:
We study the fine-grained relationships among information flows, IT use, and individual information worker productivity, by analyzing work at a midsize executive recruiting firm. We analyze both project-level and individual-level performance using: (1) direct observation of over 125,000 e-mail messages over a period of 10 months by individual workers (2) detailed accounting data on revenues, compensation, project completion rates, and team membership for over 1300 projects spanning 5 years, and (3) survey data on a matched set of the same workers' IT skills, IT use and information sharing. These detailed data permit us to econometrically evaluate a multistage model of production and interaction activities at the firm, and to analyze the relationships among communications flows, key technologies, work practices, and output. We find that (a) the structure and size of workers' communication networks are highly correlated with their performance; (b) IT use is strongly correlated with productivity but mainly by allowing multitasking rather than by speeding up work; (c) productivity is greatest for small amounts of multitasking but beyond an optimum, multitasking is associated with declining project completion rates and revenue generation; and (d) asynchronous information seeking such as email and database use promotes multitasking while synchronous information seeking over the phone shows a negative correlation. Overall, these data show statistically significant relationships among social networks, technology use, completed projects, and revenues for project-based information workers. Results are consistent with simple production models of queuing and multitasking and these methods can be replicated in other settings, suggesting new frontiers for bridging the research on social networks and IT value.

Productivity, Information Worker, Information Technology, Social Networks, Multitasking, Production Function

Abstract:
While it is now well established that IT intensive firms are more productive, a critical question remains: Does IT cause productivity or are productive firms simply willing to spend more on IT? We address this question by examining the productivity and performance effects of enterprise systems investments in a uniquely detailed and comprehensive data set of 623 large, public U.S firms. The data represent all U.S. customers of a large vendor during 1998-2005 and include the vendor's three main enterprise system suites: Enterprise Resource Planning (ERP), Supply Chain Management (SCM), and Customer Relationship Management (CRM). A particular benefit of our data is that they distinguish the purchase of enterprise systems from their installation and use. Since enterprise systems often take years to implement, firm performance at the time of purchase often differs markedly from performance after the systems go live. Specifically, in our ERP data, we find that purchase events are uncorrelated with performance while go-live events are positively correlated. This indicates that the use of ERP systems actually causes performance gains rather than strong performance driving the purchase of ERP. In contrast, for SCM and CRM, we find that performance is correlated with both purchase and go-live events. Because SCM and CRM are installed after ERP, these results imply that firms that experience performance gains from ERP go on to purchase SCM and CRM. Our results are robust against several alternative explanations and specifications and suggest that a causal relationship between ERP and performance triggers additional IT adoption in firms that derive value from their initial investment. These results provide an explanation of simultaneity in IT value research that fits with rational economic decision-making: Firms that successfully implement IT, react by investing in more IT. Our work suggests replacing either-or views of causality with a positive feedback loop conceptualization in which successful IT investments initiate a virtuous cycle of investment and gain. Our work also reveals other important estimation issues that can help researchers identify relationships between IT and business value.

Business Value of Information Technology, Productivity, Simultaneity, Causality, Software Investment, Production Function, Enterprise Resource Planning, Supply Chain Management, Customer Relationship Management

Abstract:
Information technology is major investment for most enterprises and constitutes a portfolio of investments. Just like any other investment portfolio, the IT portfolio must be balanced to achieve alignment with business strategy and the desired combination of short and long term pay off. This portfolio balancing is the role of senior management and should be integrated into firms' IT governance processes. Top financial performers have matched particular organizational practices and competencies with IT portfolio allocations to achieve specific business goals. In short, they have more IT savvy and it pays off.

Retail, business model, IT and information management, IT enabled strategy, outsourcing

Abstract:
The authors propose that a tradeoff between network diversity and communication channel band-width regulates the degree to which structurally diverse networks deliver non-redundant informa-tion to actors in brokerage positions. As the structural diversity of a network increases, the band-width of the communication channels in that network decrease, creating countervailing effects on the receipt of novel information. This argument is based on the observation that diverse networks are typically made up of weaker ties, characterized by narrower communication channels across which less diverse information is likely to flow. The diversity-bandwidth tradeoff is moderated by (a) the degree to which topics are uniformly or heterogeneously distributed over the alters in a broker’s network, (b) the dimensionality of the information in a broker’s network (whether the to-tal number of topics communicated by alters is large or small) and (c) the rate at which the infor-mation possessed by a broker’s contacts refreshes or changes over time. The authors test these ar-guments by combining social network and performance data with direct observation of the infor-mation content flowing through email communication at a medium sized executive recruiting firm. These analyses unpack the mechanisms that enable information advantages in networks and serve as a ‘proof-of-concept’ for using email content data to analyze relationships among infor-mation flows, networks and social capital.

Social Networks, Social Capital, Information Content, Information Diversity, Network Size, Network Diversity, EMail Networks, Performance, Productivity, Information Work.

Abstract:
We examine what drives the diffusion of different types of information through email networks and the effects of these diffusion patterns on the productivity and performance of information workers. In particular, we ask: What predicts the likelihood of an individual becoming aware of a strategic piece of information, or becoming aware of it sooner? Do different types of information exhibit different diffusion patterns, and do different characteristics of social structure, relationships and individuals in turn affect access to different kinds of information? Does better access to information predict an individual's ability to complete projects or generate revenue? We characterize the social network of a medium sized executive recruiting firm using accounting data on project co-work relationships and ten months of email traffic. We identify two distinct types of information diffusing over this network - 'event news' and 'discussion topics' - by their usage characteristics, and observe several thousand diffusion processes of each type of information. We find the diffusion of news, characterized by a spike in communication and rapid, pervasive diffusion through the organization, is influenced by demographic and network factors but not by functional relationships (e.g. prior co-work, authority) or the strength of ties. In contrast, diffusion of discussion topics, which exhibit shallow diffusion characterized by 'back-and-forth' conversation, is heavily influenced by functional relationships and the strength of ties, as well as demographic and network factors. Discussion topics are more likely to diffuse vertically up and down the organizational hierarchy, across relationships with a prior working history, and across stronger ties, while news is more likely to diffuse laterally as well as vertically, and without regard to the strength or function of relationships. We also find access to information strongly predicts project completion and revenue generation. The effects are economically significant, with each additional 'word seen' correlated with about $70 of additional revenue generated. Our findings provide some of the first evidence of the economic significance of information diffusion in email networks.

Networks, Information Diffusion, Productivity, Email

Abstract:
Despite evidence of a positive relationship between IT investments and firm performance, results still vary across firms and performance measures. We explore two organizational explanations for this variation: differences in firms' IT investment allocations and IT capabilities. We develop a theoretical model of IT resources, defined as the combination of specific IT assets and organizational IT capabilities. We argue that investments into different IT assets are guided by firms' strategies (e.g. cost leadership or innovation), and deliver value along performance dimensions consistent with their strategic purpose. We hypothesize that firms derive additional value per IT dollar through a mutually reinforcing system of organizational IT capabilities built on complementary practices and competencies. Empirically, we test the impact of IT assets, IT capabilities and their combination on four dimensions of firm performance: market valuation, profitability, cost and innovation. Our results, based on data on IT investment allocations and IT capabilities in 147 U.S. firms from 1999-2002, demonstrate that IT investment allocations and organizational IT capabilities drive differences in firm performance. Firms' total IT investment is not associated with performance, but investments in specific IT assets explain performance differences along dimensions consistent with their strategic purpose. In addition, a system of organizational IT capabilities strengthens the performance effects of IT assets and broadens their impact beyond their intended purpose. The results help explain variance in returns to IT capital across firms and expand our understanding of alignment between IT and organizations. We illustrate our findings with examples from a case study of 7-Eleven Japan.

Business Value of Information Technology, Information Technology Assets, Resource Based Theory, Complementarities, IT Infrastructure, IT Capabilities, IT Practices, Firm Performance

Abstract:
Social network theories (e.g. Granovetter 1973, Burt 1992) and information richness theory (Daft & Lengel 1987) have both been used independently to understand knowledge transfer in information intensive work settings. Social network theories explain how network structures covary with the diffusion and distribution of information, but largely ignore characteristics of the communication channels (or media) through which information and knowledge are transferred. Information richness theory on the other hand focuses explicitly on the communication channel requirements for different types of knowledge transfer but ignores the population level topology through which information is transferred in a network. This paper aims to bridge these two sets of theories to understand what types of social structures are most conducive to transferring knowledge and improving work performance in face-to-face communication networks. Using a novel set of data collection tools, techniques and methodologies, we were able to record precise data on the face-to-face interaction networks, tonal conversational variation and physical proximity of a group of IT configuration specialists over a one month period while they conducted their work. Linking these data to detailed performance and productivity metrics, we find four main results. First, the face-to-face communication networks of productive workers display very different topological structures compared to those discovered for email networks in previous research. In face-to-face networks, network cohesion is positively correlated with higher worker productivity, while the opposite is true in email communication. Second, network cohesion in face-to-face networks is associated with even higher work performance when executing complex tasks. This result suggests that network cohesion may complement information-rich communication media for transferring the complex or tacit knowledge needed to complete complex tasks. Third, the most effective network structures for latent social networks (those that characterize the network of available communication partners) differ from in-task social networks (those that characterize the network of communication partners that are actualized during the execution of a particular task). Finally, the effect of cohesion is much stronger in face-to-face networks than in physical proximity networks, demonstrating that information flows in actual conversations (rather than mere physical proximity) are driving our results. Our work bridges two influential bodies of research in order to contrast face-to-face network structure with network structure in electronic communication. We also contribute a novel set of tools and techniques for discovering and recording precise face-to-face interaction data in real world work settings.

Social Networks, Face-to-Face Communication, Information Worker, Productivity

Abstract:
A tension exists between two well-established streams of literature on the performance of teams. One stream contends that teams with diverse backgrounds, social structures, knowledge, and experience function more effectively because they bring novel information to bear on problems that cannot be solved by groups of homogeneous individuals. In contrast, the literature on mutual knowledge contends that shared information and experience is essential to effective communication, trust, understanding and coordination among team members. Furthermore, several distinct antecedents of mutual information and knowledge have been hypothesized, making it difficult to manage information overlap in teams. In this paper, we use a unique data set of observed email content from 1382 executive recruiting teams and detailed accounting data on their productivity to examine both the antecedents and performance effects of shared versus diverse information. We find clear evidence of an inverted-U shaped relationship between mutual information and team productivity. A significant amount of information overlap among team members is associated with higher performance while extremes of too little or too much mutual information hamper performance. We also find that geographic dispersion and social network distance are strong predictors of mutual knowledge failures, while demographic dissimilarity and organizational distance do not predict the degree of mutual information in our data. Our work helps bring together the divergent streams of literature on mutual knowledge, information diversity, and the management of team performance.

Mutual Knowledge, Diversity, Social Networks, Demography, Geographic Dispersion, Information Distance, Teams, Performance

Abstract:
Although IT portfolio management has been a best practice for some time, many companies are still getting returns from IT investments that are below their potential. New studies show that a measureable premium can be gained by implementing a set of interlocking business practices and processes, collectively called IT savvy.

IT Business Value, IT Portfolio Management, Intangible Investments, Organizational Complements to IT