Businesses Don't Capitalize On Information Advances, Journal Concludes

January 21, 1998

BALTIMORE, January 21 - Business management fails to capitalize on the revolution in the Internet and other information systems, thus costing some companies tens of millions of dollars, according to a special issue of a journal published by the Institute for Operations Research and the Management Sciences (INFORMS).

The current issue of Management Science, entitled "Frontier Research on Information Systems and Economics," concludes that there is a gap between the many potential business applications of emerging computer/communications technology and actual management practices. The use of trial-and-error experimentation, rather than careful research and development, has cost companies trying to gain profits from advances in information technology, the issue concludes.

"The most significant technological development confronting managers today is the improvement in the capabilities of information technology," write the issue's editors, Dr. Erik Brynjolfsson, a Professor of Management Science at MIT's Sloan School of Management, and Dr. Abraham Seidmann, an operations researcher with the W.E. Simon School of Business Administration at the University of Rochester.

"Technological achievements alone, however, do not ensure economic progress. Advances in information technologies can create new options and relax old constraints, but they often require commensurate changes in management practices before they create any value."

The special issue addresses this gap by outlining operations research methods that can bring management gains in the areas of electronic commerce, information systems, productivity, securities trading, and software development.

The Institute for Operations Research and the Management Sciences (INFORMS) is an international scientific society with 12,000 members, including Nobel Prize laureates, dedicated to applying scientific methods to help improve decision-making, management, and operations. Members of INFORMS work primarily in business, government, and academia. They are represented in fields as diverse as airlines, health care, law enforcement, the military, the stock market, and telecommunications.

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Institute for Operations Research and the Management Sciences

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