Chapter 8: Case Study 2. “Does IT Investment Pay Off?”

1. Apart from the annual rate of output per worker, what are other ways of measuring labor productivity?

Answer: The other way of measuring labor productivity of the worker is the output per hour of the personnel. And also evaluate the production rate of the entire workers so that you can analyze the input of your production process. The company should also measure the revenue of the company to test whether the company is undercapitalized or overcapitalized; so that the company may Barry the rate to the measure of capital. They also have to consider the punctuality and dependable of the workers.

2. What factors determine whether a new information system will increase or decrease labor
productivity?

Answer:   The company has to test the capacity of the new system if it really fits on the company. And also the company have to determine and consider the processing time if which is the fastest processing time between the old information system and new information system. If the company has to prove that the old or the new is the capable to their company so he decides whether the factor must increase or decrease.

3. Why is it so difficult to determine whether IT has increased labor productivity?

Answer: It is because the labor productivity depends on how the environment has evolved such as the company adaptability of the workers and also their process on how they run the business.


 

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