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A study on the Success Factors and Strategy of Information Technology Investment Based on Intelligent Economic Simulation Modeling
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Do-Hyung Park (Department of Management Information System, Kookmin University)
Vol. 19, No. 1, Page: 35 ~ 55
10.13088/jiis.2013.19.1.035
Keywords
Information Technology Investment, Information Technology Value, Agent-Based Simulation, Information Diffusion Effect, Information Diffusion Effect
Abstract
Information technology is a critical resource necessary for any company hoping to support and realize its strategic goals, which contribute to growth promotion and sustainable development. The selection of information technology and its strategic use are imperative for the enhanced performance of every aspect of company management, leading a wide range of companies to have invested continuously in information technology. Despite researchers, managers, and policy makers’ keen interest in how information technology contributes to organizational performance, there is uncertainty and debate about the result of information technology investment. In other words, researchers and managers cannot easily identify the independent factors that can impact the investment performance of information technology. This is mainly owing to the fact that many factors, ranging from the internal components of a company, strategies, and external customers, are interconnected with the investment performance of information technology. Using an agent-based simulation technique, this research extracts factors expected to affect investment performance on information technology, simplifies the analyses of their relationship with economic modeling, and examines the performance dependent on changes in the factors. In terms of economic modeling, I expand the model that highlights the way in which product quality moderates the relationship between information technology investments and economic performance (Thatcher and Pingry, 2004) by considering the cost of information technology investment and the demand creation resulting from product quality enhancement. For quality enhancement and its consequences for demand creation, I apply the concept of information quality and decision-maker quality (Raghunathan, 1999). This concept implies that the investment on information technology improves the quality of information, which, in turn, improves decision quality and performance, thus enhancing the level of product or service quality. Additionally, I consider the effect of word of mouth among consumers, which creates new demand for a product or service through the information diffusion effect. This demand creation is analyzed with an agent-based simulation model that is widely used for network analyses. Results show that the investment on information technology enhances the quality of a company’s product or service, which indirectly affects the economic performance of that company, particularly with regard to factors such as consumer surplus, company profit, and company productivity. Specifically, when a company makes its initial investment in information technology, the resultant increase in the quality of a company’s product or service immediately has a positive effect on consumer surplus, but the investment cost has a negative effect on company productivity and profit. As time goes by, the enhancement of the quality of that company’s product or service creates new consumer demand through the information diffusion effect. Finally, the new demand positively affects the company’s profit and productivity. In terms of the investment strategy for information technology, this study’s results also reveal that the selection of information technology needs to be based on analysis of service and the network effect of customers, and demonstrate that information technology implementation should fit into the company’s business strategy. Specifically, if a company seeks the short-term enhancement of company performance, it needs to have a one-shot strategy (making a large investment at one time). On the other hand, if a company seeks a long-term sustainable profit structure, it needs to have a split strategy (making several small investments at different times). The findings from this study make several contributions to the literature. In terms of methodology, the study integrates both economic modeling and simulation technique in order to overcome the limitations of each methodology. It also indicates the mediating effect of product quality on the relationship between information technology and the performance of a company. Finally, it analyzes the effect of information technology investment strategies and information diffusion among consumers on the investment performance of information technology.
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지능형 시뮬레이션 모형을 기반으로 한 정보기술 투자 성과 요인 및 전략 도출에 관한 연구
박도형 (국민대학교 경영대학 경영정보학부)
Abstract
최근 기업 경영에 있어 정보기술의 도입 및 전략적인 활용은 선택이 아닌 필수로 자리잡고 있다. 기업의 전략적인 목표와 정보기술 간의 상호 의존은 기업의 생존 및 성장에 중요한 역할을 하고 있으며, 이에 따라 이미 많은 기업이 지속적으로 정보기술에 투자하고 있다. 정보기술 투자 성과 관련해서는 기업 내부의 요인들과 전략들, 기업외부의 고객까지 여러 가지 복합적인 요소들이 서로 상호작용하고 있기 때문에, 각 요인들을 독립적으로 분리하여 정보기술 투자 성과에 미치는 영향력을 분석하는 것이 쉽지 않다. 이에 본 연구는 기존의 연구들을 바탕으로 정보기술 투자성과에 영향을 줄 수 있는 변수들을 도출하여, 각 변수들의 관계를 수리적인 모델링을 통해 단순화시키고, 시뮬레이션 방법론을 이용하여 각 변수들의 변화에 정보기술 투자 성과는 어떻게 달라지는지를 밝혔다. 본 연구의 결과는 정보기술 투자는 서비스의 품질을 증가시켜 경제학적인 성과들에 간접적으로 영향을 주고, 정보기술 투자와 동시에 소비자 잉여는 증가되지만, 큰 투자비용으로 회사의 이익은 감소하게 된다. 그리고 시간이 지남에 따라 품질 증가에 관한 정보가 고객들 사이에 퍼져 나가게 되므로 최종적으로 기업의 수익을 증가시켜준다. 또한, 정보기술 투자 성과 극대화를 위해서는 회사가 제공하는 서비스와 소비자들의 네트워크 효과 등이 고려되어 정보기술 투자 여부를 결정하고, 회사에 맞는 정보기술 투자 전략을 세워야 함을 시뮬레이션 모형을 통해 확인할 수 있었다. 구체적으로, 한 번에 많은 투자를 할 경우는 단기적인 성과는 클 것으로 기대되나, 장기적으로 좋은 성과가 이뤄지지 않는다. 그러나 정보의 확산 속도가 빠르거나 정보의 장벽이 될 수 있는 정보를 받지 못하는 소비자가 적을 경우 단기에 집중 투자 하는 것이 많은 수요를 얻을 수 있다. 또, 여러 번에 걸쳐 투자하는 경우는 적당한 주기를 가지게 될 경우 장기적으로 큰 성과를 낼 수 있음을 확인할 수 있었다. 본 연구는 경제학 모델링과 시뮬레이션을 결합시켜, 각각의 한계를 모두 극복할 수 있는 방법론을 활용했다는 측면과, 정보기술 투자의 성과를 제품 품질의 매개 효과 모형에 적용하여 정보기술 투자와 기업 성과간의 관계를 보여주었다는 측면, 마지막으로 정보기술 투자 전략 및 정보의 확산 효과를 반영하여 정보기술 투자의 성과를 확인할 수 있다는 측면에서 의의가 있다.
Cite this article
JIIS Style
Park, D.-H., , "A study on the Success Factors and Strategy of Information Technology Investment Based on Intelligent Economic Simulation Modeling", Journal of Intelligence and Information Systems, Vol. 19, No. 1 (2013), 35~55.

IEEE Style
Do-Hyung Park, "A study on the Success Factors and Strategy of Information Technology Investment Based on Intelligent Economic Simulation Modeling", Journal of Intelligence and Information Systems, vol. 19, no. 1, pp. 35~55, 2013.

ACM Style
Park, D.-H.,, 2013. A study on the Success Factors and Strategy of Information Technology Investment Based on Intelligent Economic Simulation Modeling. Journal of Intelligence and Information Systems. 19, 1, 35--55.
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@article{Park:JIIS:2013:519,
author = {Park, Do-Hyung},
title = {A study on the Success Factors and Strategy of Information Technology Investment Based on Intelligent Economic Simulation Modeling},
journal = {Journal of Intelligence and Information Systems},
issue_date = {March 2013},
volume = {19},
number = {1},
month = Mar,
year = {2013},
issn = {2288-4866},
pages = {35--55},
url = {http://dx.doi.org/10.13088/jiis.2013.19.1.035 },
doi = {10.13088/jiis.2013.19.1.035},
publisher = {Korea Intelligent Information System Society},
address = {Seoul, Republic of Korea},
keywords = { Information Technology Investment, Information Technology Value, Agent-Based Simulation, Information Diffusion Effect and Information Diffusion Effect },
}
%0 Journal Article
%1 519
%A Do-Hyung Park
%T A study on the Success Factors and Strategy of Information Technology Investment Based on Intelligent Economic Simulation Modeling
%J Journal of Intelligence and Information Systems
%@ 2288-4866
%V 19
%N 1
%P 35-55
%D 2013
%R 10.13088/jiis.2013.19.1.035
%I Korea Intelligent Information System Society