Class Update - Week 12

We started the course with the WHR case study and the mandate to perform the capital budgeting analysis. We have reached the point, that we are ready to not only generate the NPV of this project, but be able to perform sensitivity/risk analysis, and make recommendations on how to monitor this process to ensure that it delivers its expected value. This is the first objective for week 12.

While our focus has been on the value of IT investments and how to ensure that we maximize the value from these investments, another topic that deserves attention is that of IT budgets and IT portfolio management. Investment like the one undertaken by WHR constitute a substantial request for financial and human resources. The second objective for this week will be to review corporate budgets (pros and cons), the IT budgeting process & factors affecting levels of IT budgets, and IT portfolio management

Topics and Readings for Week 12

Theory: Chapter 8 (monitoring IT investments) and chapter 9 (IT budgets and IT portfolio management).

Seminar: We will use the Whirlpool case study to review the NPV analysis and  perform a risk analysis (sensitivity analysis). We will use the feedback from the analysis to develop an ERP implementation balanced scorecard for WHR.

Assignments for Week 12

The online quiz will be a based on chapters 8  & 9 and material covered in the seminars of week 11 and 12. The quiz will be available on Friday at 12:30 pm.

Class Update - Week 11

The NPV (expected payoffs) of a technology investment depends on the assumptions made by managers involved in the adoption of the new technology. These assumptions reflect their expectations regarding implementation (budget, time, and functionality), expectations regarding users’ ability to extract value from the new technology (increase sales or contain cost), as well as expectations regarding reactions of competitors and trading partners.

In previous chapters, we focused on factors that may affect these assumptions, such as business and IT strategy, IT capability, stage of technology adoption, and industry structure. This week, we shift our focus to implications of failure to meet these assumptions (risk analysis) on NPV. We will use this risk analysis to make recommendation on  how to monitor the progress during implementation and value extraction. The aim of the monitoring process is to introduce an element of accountability and ensure that proper action would be taken to ensure the maximization of the value of the technology investment.

Topics and Readings for Week 11

Theory: We will focus on Chapter 8 (monitoring IT investments). The primary focus of this chapter is on the idea of causality (cause and effect) as the foundation for the creation of a balanced scorecard for technology implementation and use.

Seminar: We will use the mini-case of BlueBikes  to perform a risk analysis (sensitivity analysis). We will try to estimate the expected effect of a failure to meet an assumption on NPV. In parallel, we will look at the statistical analysis for the team project.

Assignments for Week 11

The online quiz will be a based on chapters 8  and material covered in the seminar (this includes material related to the team project). The quiz will be available on Friday at 12:30 pm.

The team project is due on Friday at 8:30 am. Please follow instructions to upload your project in the Learn dropbox.

Class Update - Week 10

We started our course with the discussion about a firm (WHR) that wants to perform capital budgeting analysis of a major information technology investment. An investment in an enterprise system. Our objective has been on how to approach this evaluation from a strategic standpoint. We started by looking at technology innovation adoption and how the position that a firm takes will affect the expected payoffs. We combined Rogers’ innovation adoption theory with Gartner’s Hype cycle to estimate expected payoffs and duration of competitive advantage.

We learned that technological innovations have the potential to disrupt the competitive landscape and it is important for a firm to consider its technology related investments in the context of its strategic priorities. We used information generated in financial reports to make sense of business strategy and industry structure, and looked at how technology adoption (such as data analytics) can shape the competitive position of adopting firms.

For firms to leverage data analytics they must have access to data, and this justified the need to have at a minimum a basic understanding of database theory. We used the examples of database schemas capturing business processes of different firms as a way of envisioning the foundation of an enterprise system. This brought the realization that even though enterprise systems constitute a mature technology today, they are critical for any firm that wants to leverage data analytics, because they are the source of all internal data.

Understanding the importance of implementing or upgrading a firm’s enterprise systems, brought us back to the place we started, i.e., perform the capital budgeting analysis for WHR, which is the topic of Week 10.

Topics and Readings for Week 10

Theory: We will focus on Chapter 7 (evaluation of IT investments). The primary focus of this chapter is on the expected benefits from IT investments.

Seminar: We will use the mini-case of BlueBikes in order to understand the foundation of the capital budgeting setting used in the WHR case. In parallel, we will look at the statistical analysis that we will need for the team project.

Assignments for Week 10

The online quiz will be a based on chapters 7  and material covered in the seminar (this includes material related to the team project). The quiz will be available on Friday at 12:30 pm.

The role of accouting on big data and analytics

AAA is organizing a conference on big data and analytics.
See the following link for details: Accounting IS Big Data