A comparative study on the time lag effect of investments in innovative information systems

Abstract

The IT productivity paradox is a phenomenon in which productivity doesn’t increase proportionally to IT investments. This discrepancy might be a result of the lag associated with learning and adjusting to a new technology. Information systems investment performance improves only after members or users learn and adapt to it. Nevertheless, many existing performance evaluation models cannot draw clear conclusions because they do not consider the time lag. This time lag can cause many problems such as a reduction in investments, change in informatization plan, or eventually failure of its implementation. Therefore, we propose a performance evaluation framework considering performance layers and time lags. We classify time lags into VTL (vertical time lags) and HTL (horizontal time lags) and classify existing indicators into the two categories. We identified time lags from the vertical perspective such as input, process, and output layers and also time lags in each layer from the horizontal perspective. These time lags might differ slightly across countries, and the type of system. A comparative study showed that there was a three-year HTL for WORKNET in Korea, and VTLs of one year for valve companies and one year for Amazon.com in the U.S.