Our primary objective during the first week was to understand the value adding proposition of the course. We discussed patterns and trends in IT spending, and explored some of the issues that firms, such as WHR face, when they invest in IT. We leveraged a combination of theory (technology adoption theory) and analytics (statistical theory and R) to demonstrate the value of data analytics in an accounting and finance setting.
Topics and Readings for Week 2
Lecture: When firms invest in IT, they expect to achieve certain objectives. The justification, possible manifestations, and expected payoffs of IT spending are the remaining topics that we will discuss in the rest of chapter 1. (Read pp. 25-29)
Firms invest in IT hoping to increase sales, reduce costs, or both. While the argument sounds reasonable, early empirical evidence showed that this expected positive association between IT spending and firm performance should not be taken for granted. Maximizing the payoffs from IT investment requires planning and the development of a vision regarding the role of IT in the organization (IT strategy) that is aligned with the firm's business strategy. We will start exploring strategic management related topics and business strategy in Chapter 2 (Read pp. 40-69)
Seminar: We will compare IT spending patterns between two industries over time (problem 1.9.1), and leverage Compustat data to generate estimates of IT spending at WHR (problem 1.9.2).
Assignments/Quizzes
The second online quiz will be a based on Chapter 1 and material from the seminar. The quiz will be available on Friday at 12:30 pm.
