The new productivity paradox

Mark C. Anderson; Rajiv D. Banker; Sury Ravindran

doi:10.1145/636772.636776

The new productivity paradox

Mark C. Anderson, Rajiv D. Banker, Sury Ravindran

Business, The W.A. Franke College of (CoB)

Research output: Contribution to journal › Review article › peer-review

81 Scopus citations

Abstract

An identification and evaluation of the possible explanations for the high market valuation of Y2K spending is presented. A market-valuation model is used to determine the valuation multiple on Y2K spending of the sample fortune 1000 firms on March 31, 1999. The multiple on Y2K spending of 62.10 for March 31, 1999 indicates that about $60 of firm value was associated with each $1 of Y2K spending. Due to the high costs of remediating and maintaining legacy systems, many companies were also found to use the Y2K opportunity to replace an existing cluster of legacy systems with an enterprise resource planning (ERP) system integrating various internal applications through a common data base.

Original language	English (US)
Pages (from-to)	91-94
Number of pages	4
Journal	Communications of the ACM
Volume	46
Issue number	3
DOIs	https://doi.org/10.1145/636772.636776
State	Published - Mar 2003

ASJC Scopus subject areas

General Computer Science

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AB - An identification and evaluation of the possible explanations for the high market valuation of Y2K spending is presented. A market-valuation model is used to determine the valuation multiple on Y2K spending of the sample fortune 1000 firms on March 31, 1999. The multiple on Y2K spending of 62.10 for March 31, 1999 indicates that about $60 of firm value was associated with each $1 of Y2K spending. Due to the high costs of remediating and maintaining legacy systems, many companies were also found to use the Y2K opportunity to replace an existing cluster of legacy systems with an enterprise resource planning (ERP) system integrating various internal applications through a common data base.

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The new productivity paradox

Abstract

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