Nirup M. Menon

Productivity of Information Systems in the Healthcare Industry

This research paper analyzes the impact of information technology (IT)in a healthcare setting using a longitudinal sample of hospital data from 1976 to 1994. We classify production inputs into labor and capital categories. Capital is classified into three components--medical IT capital, medical capital, and IT capital--and labor is classified into two components, medical labor and IT labor. Results provide evidence that IT contributes positively to the production of services in the healthcare industry.

Information technology value through different normative lenses

Abstract: The influence of IT investments on organizational performance is revisited. Bounded rationality, organizational controls, and political forces may constrain optimal selection of inputs and appropriate substitution between inputs. For example, firms may not be able to attain an optimal level of IT by substituting IT for labor (for reasons such as pressure from the labor union). Besides estimating a link between IT investments and firm output, this paper presents a study of the link between IT investment levels and the efficiency of processes. Nonparametric and parametric techniques were applied to financial data on hospitals collected over a period of eighteen years. We found that cost and technical and allocative efficiencies are statistically significant in the production framework. We also found that hospitals that were characterized by high technical efficiency also used a greater amount of IT capital than firms that exhibited low technical efficiency. A group of hospitals exhibiting high technical efficiency also exhibited low allocative efficiency, indicating that, while processes may have been efficient, resource allocation and budgeting between various categories of capital and labor have not been efficient. Our results also differ from previously published results because we find that IT labor had a negative contribution to productivity and that non-IT capital had a greater contribution to productivity than IT capital.

Object-oriented business process modeling and simulation:: A discrete event system specification framework

Abstract In this study, we suggest that the Discrete Event System Specification (DEVS) framework, derived from engineering research, provides a useful Object-Oriented Modeling and Simulation (OOMS) approach for developing, simulating and evaluating complex business process models. A survey of other OOMS approaches to business process modeling, and their evaluation with regard to model representation, manipulation and implementation, suggests that there are some limitations which could be addressed by DEVS. We conducted a case study of a business process in a “real world” setting to explore some of the issues involved in implementing the DEVS framework. Our findings suggest that DEVS provides a robust framework for model representation based on its concept of atomic models and its ability to represent higher-level models that are closed under coupling. It also provides considerable model manipulation capabilities through a System Entity Structure (SES), the pruning of the SES by inclusion of instances of models which correspond to processing alternatives, and a relatively easy transition from conceptual models to simulation models. Finally, our implementation of DEVS in a business situation contributes to the parent discipline by highlighting a number of methodological issues such as discrepancy resolution by identifying root causes, assumptions surfacing and re-examination, and an awareness of the political and cultural context of business process modeling. Our study suggests that IS research on developing OOMS approaches to business process modeling can derive considerable benefits by leveraging off DEVS-related research in engineering.

Network effects and social dilemmas in technology industries

Researchers investigating technology market dynamics have focused primarily on how a firms economic and marketing strategy for pricing, distribution, packaging , and so on affect the market and the firms position in it. This perspective reflects a managerial viewpoint, which focuses on maximizing a firms profits and tends to emphasize short-term outcomes. We take a different view - the social planners view - of the technology industry, which attempts to maximize total benefits for both firms and consumers over the long run. Network effects (also termed network externalities) impact how these total benefits, or social surplus, evolve over time in technology markets. Applying economic, social science, and biology theories to technology market dynamics, we find that network-effect-sensitive factors such as available capital, innovation, and product variety indicate whether an industry is heading toward healthy expansion or an unhealthy monopoly and ultimate decline. Increasing the social surplus to ensure long-term market health requires proactive measures such as industry self-regulation and government regulation.

Online Privacy at a Premium

Online privacy has been a significant concern of customers in online transactions. Several technical, economics based, and regulatory mechanisms have been proposed to address online privacy. One proposed market-based mechanism is the privacy seal. In this paper, we present some empirical evidence of the impact of displaying a privacy seal on the product prices of online firms. Using data carefully collected on homogeneous products sold by pairs of online firms — one firm in the pair with a privacy seal, and the other firm without the seal — we find that firms with a privacy seal in fact do charge a price premium on their products, compared to firms without a seal. The amount of this price premium is affected by the product prices, but is not affected by the product demand. Based on the data, we also quantify the magnitude of this privacy seal induced price premium.