Impact of Simulation in New Product Development - MIT

Another way to think about IT value• In our prior research we found that few firms adjust staffing levels afterimplementation of efficiency-enabling IT, despite their making similar claimsabout business value• Managers typically do not have incentives to reduce size of their groups• Employees recognize initiates that will reduce headcount and mayundermine them (Sterman, Repenning & Koffman, Mngt Sci 1997)• Most firms maintain staffing levels and use IT-enabled efficiencies to workbetter—design more models with more features, serve customers better…“IT associated with increases in…variety, customer convenience, and service”(Brynjolfsson and Hitt, Jour Ec Perspectives 2000)• Because of this, most managers are—rightly—skeptical about many claims theyhear about potential IT-generated business value• Approach that looks at what companies actually do with IT-enabled efficienciescan help in two ways• Even simple models—if there are no metrics now—can spur better decisions• Can also make strategic choices enabled by IT more explicit and considered14© 2007 Robert Laubacher 14