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Essay on Information Technology Management
Information Technology: Its Definitions
Information technology can be defined in a variety of ways. In terms of capital, among the most common is the BEA's (U.S. Bureau of Economic Analysis) category "Office, Computing and Accounting Machinery (OCAM) which consists mostly of computers. Some researchers look particularly at computer capital, while others consider the BEA's broader category, "Information Processing Equipment (IPE)." IPE includes communications equipment, scientific and engineering instruments, photocopiers and related equipment. In addition, software and related services are sometimes included in the IT capital. Modern studies often examine the output of information systems staff, or of workers who use computers.
"Labor productivity" is calculated as the level of production divided by a given level of labor input. "Multifactor productivity" is calculated as the level of output for a given level of several inputs, normally labor, capital and materials. In theory, multifactor output is a better measure of a firm or industry's efficiency because it adjusts for shifts among inputs, such as substituting capital equipment for labor. Nevertheless, the data needed to calculate multifactor productivity are more complex.
In productivity calculations, "output" is defined as the number of units produced times their unit value, proxied by their "real" price. Determining the real price of a good or service requires the calculation of individual price "deflators" to eliminate the effects of inflation.
The output of IT can be measured using data on the whole economy, on particular industries or on individual firms. In the 1980s and early 1990s, disappointment in information technology was reported in articles revealing broad unresponsive correlations with economy-wide productivity. Several econometric estimates also showed low IT capital productivity in a variety of manufacturing and service industries....
