Knowledge that Transforms

The received wisdom on IT chargeback is that a chargeback system with certain key characteristics, such as usage-based charges, stable rates, understandable bills, and so forth, will help firms make effective decisions on IT investment and use. Eccles' model of transfer pricing provides a theoretical framework for this claim, and it also explains why chargeback systems can raise issues of fairness or create conflict between IT and its clients, as the IT literature has pointed out. Applying Eccles' model, this paper reports on a study of 10 organizations' IT chargeback systems and their impacts on business managers' economic decisions and on evaluations of IT and business unit performance. Respondents in just four of the 10 firms reported that chargeback had significantly influenced IT investment decisions. In addition, the business unit respondents at those same four firms offered more positive assessments of IT than their counterparts at other sites. These differences in chargeback-related outcomes could not be accounted for by looking at differences in the chargeback characteristics that are most commonly described in the IT literature. What was different in these four firms was that chargeback was being used to foster communication between IT and the business units. This communication was generating a rich shared understanding for both parties of the costs and benefits of alternative IT investments and service offerings. The literature on partnership argues that complex IT investment decisions demand a strong IT-business partnership. The analysis suggests that IT units in just four of the 10 firms were tapping into the potential of chargeback to facilitate the development of a partnership with their business unit counterparts.

This case was originally published as part of a hypertext paper: King, J.L. and Applegate, L.M., Crisis in the Case Study Crisis: Marginal Diminishing Returns to Scale in the QuantiativeQualitative Research Debate, Information Systems and Qualitative Research (ed. Allen Lee, Jonathon Liebenau, andJan DeGross), Chapman Publishing, 1997. The paper and case are also available online at: www.hbs.edu/applegate/ cases/research.

As organizations face increased competitive pressures and technological changes, their attention is focusing on how to attain strategic benefits from information technology investments, including investments in people. From a human resources perspective, one debate centers on how to attract and retain information technology (IT) professionals. Somewhat paradoxically, it is suggested that to retain IT professionals, organizations must provide both technical and business oriented career opportunities. This paper presents a case study of one organization, The Mutual Croup, in which more than 70 IT professionals permanently moved into non-IT, business unit jobs during the 1980s and early 1990s. Using interviews and surveys of 51 former IT professionals, this research investigated the characteristics of the individual, the organization, the first non-IT job, and the transition period. The conclusion from the findings is that IT professionals who moved to non-IT jobs in the line made the transition without the benefit of deliberate preparation, formal transition programs, or safety nets to reduce the risk. Some conditions existed at The Mutual Group that may have assisted them, including good relations between IT and the line, friends and mentors in line units, and a willingness to take risks in pursuit of new challenges. One contribution of this paper is that it begins to fill a gap in the career mobility literature, based on individuals and their stories of change. It also attempts to understand the role of context in one organization that is a recognized leader in the use of IT for competitive advantage.

Most research on information presentation is based on the rational approach to display design. This approach assumes that the quality of displays is determined by their relative efficacy to provide the relevant information for the viewer, as assessed through variables such as response latency, accuracy, or decision quality. However, presentations often are intended to convince viewers and create desired impressions. These considerations may lead to the choice of displays that differ from those prescribed by the rational approach. Three experiments addressed the degree to which the presenter's objectives and the desirability of the presented information affect presenters' preferences for display formats. Presenters exhibited different preferences when they tried to create a favorable impression compared to when they tried to reach optimal decisions or provide information for optimal decision making by others. There was an increased use of depth in graphic displays when impressions were crucial, and this tendency was particularly strong when the presented information was undesirable for the presenter. The results demonstrate the importance of understanding the social circumstances of information presentation when evaluating the adequacy of display formats.

This paper presents a model of the IS applications portfolio and illustrates how its "health" can be assessed through an example from process manufacturing. The health assessment is based on an evaluation by senior managers of a business unit's portfolio of information systems. This assessment is made on five separate, but related, attributes of each system in the portfolio: importance, investment, technical quality, use, and management value. The "Health Grid" is introduced as a way of representing the IS applications portfolio in order to facilitate the assessment and interpretation of its health. One of the advantages of using the grid is to make such an assessment explicit, transparent, and discussible. In an example, the Health Grid is used to assess and interpret the IS applications portfolio of the most profitable business unit in a large process manufacturing firm. The applications portfolio, consisting of 18 systems, was generally assessed as requiring attention. For example, there was no evidence of any relationship between the investment in a given system and its management value. The paper includes a suggested approach for using the Health Grid and an analysis of the strengths and weaknesses of the approach. A description of the changes made to the IS portfolio in the example firm after the initial data collection completes the paper.