Hsihui Chang

Plant information systems, manufacturing capabilities, and plant performance

Firms have been investing over

The super-efficiency procedure for outlier identification, not for ranking efficient units

5 billion a year in recent years on new information technology and software in their manufacturing plants. In this study, we develop a conceptual model based on the theory of dynamic capabilities to study how manufacturing plants realize improvements in plant performance by leveraging plant information systems to enable implementation of advanced manufacturing capabilities. We develop hypotheses about relationships between information systems, their impact on manufacturing practices, and the overall impact on plant performance. Analysis of survey data from 1,077 U.S. manufacturing plants provides empirical support for the dynamic capabilities model and suggests that manufacturing capabilities mediate the impact of information systems on plant performance. Our results underscore the importance of manufacturing and organizational capabilities in studying the impact of IT on manufacturing plant productivity, and provide a sharper theoretical lens to evaluate their impact.

A balanced scorecard analysis of performance metrics

In this paper, we conduct simulation experiments to evaluate the performance of two alternative uses of the super-efficiency procedure in Data Envelopment Analysis (DEA). The first is for outlier identification and the second is for ranking efficient units. We find that the ranking procedure does not perform satisfactorily. In fact, the correlations between the true efficiency and the estimated super-efficiency are negative for the subset of efficient observations, and the conventional DEA model performs as well as the super-efficiency DEA model when all observations are considered. However, when data are contaminated with outliers, the use of the super-efficiency model to identify and remove outliers results in more accurate efficiency estimates than those obtained from the conventional DEA estimation model.

Evidence on economies of scale in software development

Abstract Many organizations have invested substantial resources in recent years to implement a balanced scorecard of performance metrics. From a historical focus exclusively on financial metrics of performance, the emphasis has shifted recently to a consideration of a portfolio of nonfinancial performance metrics related to customers, business process and technology. In this paper, we investigate the best practice frontier relationship between a financial performance metric (return on assets––ROA) and three nonfinancial performance metrics (number of access lines per employee, percentage of digital access lines and percentage of business access lines) reported and used in the US telecommunications industry. Analyzing detailed data from over fifty local exchange carriers for a period of five years (from 1993 to 1997), we find that managers must tradeoff contemporaneous ROA when increasing the percentage of business access lines. We also find that managers do not have to trade off ROA with the other two nonfinancial performance metrics because these metrics are contemporaneously congruent.

Equivalence and implementation of alternative methods for determining returns to scale in data envelopment analysis

Abstract Researchers and practitioners have found it useful for cost estimation and productivity evaluation purposes to think of software development as an economic production process, whereby inputs, most notably the effort of systems development professionals, are converted into outputs (systems deliverables), often measured as the size of the delivered system. One central issue in developing such models is how to describe the production relationship between the inputs and outputs. In particular, there has been much discussion about the existence of either increasing or decreasing returns to scale. The presence or absence of scale economies at a given size are important to commercial practice in that they influence productivity. A project manager can use this knowledge to scale future projects so as to maximize the productivity of software development effort. The question of whether the software development production process should be modelled with a non-linear model is the subject of some recent controversy. This paper examines the issue of non-linearities through the analysis of 11 datasets using, in addition to standard parametric tests, new statistical tests with the non-parametric Data Envelopment Analysis (DEA) methodology. Results of this analysis support the hypothesis of significant non-linearities, and the existence of both economies and diseconomies of scale in software development.

Impact of Information Technology on Public Accounting Firm Productivity

Abstract This paper discusses alternative methods for determining returns to scale in DEA. The methods for estimating returns to scale in DEA, as developed by Banker (1984), Banker, Charnes and Cooper (1984) and Banker and Thrall (1992), are proved to be conceptually equivalent to the two-stage methods of Fare, Grosskopf and Lovell (1985) when their assumptions apply. Here the emphasis is on the CCR model of DEA and very simple methods are introduced for determining returns to scale locally with this model by reference to Bankers concept of Most Productive Scale Size.

Determinants of Hospital Efficiency: the Case of Central Government-owned Hospitals in Taiwan

In recent years, information technology (IT) has played a critical role in the services provided by the public accounting industry. However, no empirical research has evaluated the impact of IT on public accounting firms. This study focuses on five offices of an international public accounting firm that recently made large IT investments, primarily in audit software and knowledge‐sharing applications. Both qualitative and quantitative information from the research site are analyzed to estimate the change in productivity following the implementation of IT. The results from both regression analysis and Data Envelopment Analysis (DEA) indicate significant productivity gains following IT implementation, documenting the value impact of IT in a public accounting firm.

Productivity Change, Technical Progress, and Relative Efficiency Change in the Public Accounting Industry

Abstract This paper combines data envelopment analysis (DEA) with regression analysis to evaluate the efficiency of central government-owned hospitals in Taiwan over the five fiscal years between 1990 and 1994. Efficiency is first estimated using DEA with the choice of inputs and outputs being specific to hospital operations. A multiple regression model is then employed in which the efficiency score obtained from the DEA computations is used as the dependent variable, and a number of hospital operating characteristics are chosen as the independent variables. The results indicate that the scope of services and proportion of retired veteran patients are negatively and significantly associated with efficiency, whereas occupancy is positively and significantly associated with efficiency. Furthermore, the results also show that hospital efficiency has improved over time during the periods studied and, given the contemporary focus on concerns regarding efficiency in health care, the results provide an indication that inter-temporal efficiency gains are attainable in the health-care sector in anticipation of the implementation of the National Health Insurance Programme (Act).

Taiwan quality indicator project and hospital productivity growth

We present evidence on components of productivity change in the public accounting industry toward the end of the 20th century. Using revenue and human resource data from 64 of the 100 largest public accounting firms in the United States for the 1995-1999 period, we analyze productivity change, technical progress, and relative efficiency change over time. The average public accounting firm experienced a productivity growth of 9.5% between 1995 and 1999. We find support for the hypothesis that technical progress rather than an improvement in relative efficiency was the reason for this productivity growth. Firms that were early movers into management advisory services (MAS) and those that emphasized growth in MAS over growth in the traditional audit and tax services enjoyed significantly higher productivity growth than their peers. These firms also contributed significantly more to the industrys technical progress.

The Public Accounting Industry Production Function

Abstract The Taiwan Quality Indicator Project (TQIP) is a quality management program that measures and monitors the healthcare quality of hospitals in Taiwan. This paper examines the impact of TQIP participation on hospital productivity growth with the application of the Malmquist productivity change index based on data envelopment analysis (DEA). Analyzing operations data from 31 TQIP regional hospitals over the period 1998–2004, we find that TQIP hospitals improved their productivity in the post-TQIP period. This improvement is attributable to quality change and relative efficiency progress. The simultaneous enhancement in both quality and relative efficiency coincides with the philosophy of total quality management (TQM) spirit, and confirms the efficiency improvement and quality assurance functions of TQIP.