IT Portfolio Management Step-by-Step: Unlocking the Business Value of Technology

1.9. APPENDIX 1A: Selected Firm-Level Studies of IT Returns

Study	Data Sample	Findings
IT and Firm Performance
Strassmann [1990]	38 U.S. companies	No correlation between IT spending and firm performance.
Loveman [1994]	60 Business units in 20 U.S. companies	IT investments add nothing to output.
Barua et al. [1995]	Same as Loveman [1994]	IT improves intermediate output if not final output.
Brynjolfsson and Hitt [1993]	Large U.S. manufacturers	Large U.S. manufacturers
Brynjolfsson and Hitt [1995]	Large U.S. manufacturers	Firm effects account for half of productivity benefits of earlier study.
Lichtenberg [1995]	U.S. firms, 1989–1991	IT has excess return; one IS employee can be substituted for six non-IS employees without affecting output.
Brynjolfsson and Hitt [1996]	367 Large U.S. firms	Gross return on IT investments of 81%. Net return ranges from 48% to 67%, depending on depreciation rate.
Hitt and Brynjolfsson [1996]	370 U.S. firms	IT investments increase firm productivity and consumer welfare, but not profitability.
Dewan and Min [1997]	300 Large U.S. firms	IT is a net substitute for both capital and labor, and shows excess returns relative to labor input.
Black and Lynch [1997]	1621 U.S. manufacturing establishments	Productivity not affected by presence of a particular management practice but by implementation, especially degree of employee involvement. Nonmanagerial use of computers related to productivity.
Brynjolfsson et al. [1998]	Sample of Fortune 1000 U.S. firms, 1987–1994	The stock market value of $1 of ...