CONTRASTING NEURAL NETS WITH REGRESSION IN PREDICTING PERFORMANCE IN THE TRANSPORTATION INDUSTRY

The purpose of this paper is to compare and contrast traditional regression models with a neural network model, in order to predict performance in the transportation industry. No regression model has emerged as obviously superior in previous work conducted on predicting transportation performance. Therefore, a neural network model was investigated as an alternative to regression. It was found that a neural net model outperformed the corresponding random effects specification, but did not perform as well as the fixed effects specification.Information Systems Working Papers Serie

INFORMATION TECHNOLOGY INVESTMENT AND PRICE RECOVERY EFFECTS IN INTERNATIONAL BANKING

Finns invest in information technology (IT) to create various kinds of leverage on firm profitability and performance. However, IT researchers have concentrated their efforts on the productivity impacts of technology, at the employee, process, firm, industry, and economy levels of analysis, to the exclusion of other business value impacts. Not captured by productivity metrics are the significant benefits that may accrue to the firm as product quality improves, managerial assessment of risk is enhanced, time to market and other cycle time reductions are made, and new ways to control firm input and output prices become available to management. These kinds of impacts reflect price recovery improvements - the ratio of the prices of a firm's outputs (of goods and services) to the prices of the inputs it consumes in production - and they are rarely measured or understood in a systematic way. In this paper, we argue that it is appropriate to reconsider the current measurement and research agenda that aims to discover and document the payoffs that accrue from corporate investments in IT. We illustrate the extent to which IT investment may be motivated by management's understanding of the potential price recovery payoffs (even if they fail to carefully measure or report them) in the context of trading and treasury operations in international banking. We find that price recovery captures a previously unmeasured dimension of the business value of IT.Information Systems Working Papers Serie

Methodological Issues in the Assessment Market Share Effects of Airline Computer Reservations Systems

The business value of airline firm investments in computerized reservation systems (CRSs) has been documented in the businesspress,governmentlitigationandincasestudies,butjustacouplestudiesofferempiricalresults. Thisresearchextends what we know about the dynamics of airline market share creation as a result of travel agency automation. (“Market share” is commonly understood to mean the portion of total revenue passenger miles captured by an individual carrier from an origin to a destination city-pair.) At another more general level, it aims to deliver modeling and methodological insights that bear on contemporary settings in which information technology (IT) is employed in the marketing mix. In electronic commerce, for example, these include the use of point-of-sale debit systems or electronic money as ways-to-pay, web-based versus traditional corporate advertising, and participation in electronic markets for the sale of physical goods

RE-ARCHITECTING AND RE-ENGINEERING TRADING AND TREASURY SYSTEMS IN THE MERGER OF CHEMICAL BANK AND MANUFACTURERS HANOVER TRUST -- An Interview with Brian Slater, Vice-President, Chemical Bank

This chapter presents an edited transcript of an interview held in August 1993 with Brian Slater, a vice-president in the Global Bank at Chemical Bank. Slater is responsible for the firm's U.S.-based trading and global risk management systems. The interview was conducted in the context of Project 1990s -- the U.S. Council for International Banking's Study on Information Technology Investment and International Banking Performance. The purpose of the discussion was to develop background information on the issues the bank's senior management team faced in merging the trading and treasury functions of Chemical Bank and Manufacturers Hanover Trust. The new Global Bank faces challenges in the areas of global risk management, cost-effective delivery of in formation technology-based products, trading infrastructure application functionality gaps, and human resource management that can be best addressed by a shift to a new paradigm for trading and treasury application software development: reuse of object-oriented representations of the bank's systems. We now turn to the details of the discussion that develops these themes.Information Systems Working Papers Serie

APPROPRIABILITY AND THE INDIRECT VALUE OF CRS OWNERSHIP IN THE AIRLINE INDUSTRY

It is difficult for the firm investing in information technology (IT) to appropriate a1 of the benefits from its investment for itself- it is very easy to imitate innovations in IT. Airlines have installed computerized reservations systems (CRSs) in travel agencies in order to appropriate the returns from their investments in information technology. The airlines expected to obtain a number of benefits from this strategy including increased efficiency, possible bias in favor of the CRS owner on the part of the travel agent, and fees from other airlines for making reservations for them. The purpose of this paper is to evaluate the impact of the indirect (non-fee) benefits to CRS owners from deploying systems in travel agencies. These indirect benefits should be seen in the vendor airline's market share between cities and in the overall performance of the airline at an industry level. This paper models airline performance as a function of CRS ownership at two levels: for selected city-pairs and at the overall level of the firm. The city-pair analysis employs a multinomial logit market share model using five years of data on 72 routes. The industry model uses longitudinal data for a panel of ten airlines for twelve years. The results of both analyses support hypotheses that CRS ownership is positively related to airline performance, It appears that strong airlines have appropriated the indirect benefits of their CRSs, turning them into highly specialized assets for further travel-related innovation.Information Systems Working Papers Serie

Appropriating Value From CRS Ownership in the Airline Industry

It is difficult for the firm competing through information technology (IT) resources to gain a sustainable advantage because systems are easy to imitate and often substitute resources are available to competitors. The innovator may be unable to appropriate all of the benefits from IT investments. Airlines have installed computerized reservations systems (CRSs) in travel agencies in order to appropriate the returns from their investments in information technology. The airlines expected to obtain a number of benefits from this strategy including increased efficiency, possible bias in favor of the CRS owner on the part of the travel agent, and fees from other airlines for making reservations for them. The purpose of this paper is to evaluate the appropriation of value by CRS owners from deploying systems in travel agencies. These benefits, beyond fees from travel agents, should be seen in the vendor airline's market share between cities and in the overall performance of the airline at an industry level. This paper models airline performance as a function of CRS ownership at two levels: for selected city-pairs and at the overall level of the firm. The city-pair analysis employs a multinomial logit (MNL) market share model that analyzes five years of data on 72 city-pair routes. The industry model uses longitudinal data for a panel of ten airlines for twelve years. The results of both analyses support hypotheses that CRS ownership is positively related to airline performance. It appears that strong airlines have appropriated the benefits of their CRSs, turning them into highly specialized assets for further travel-related innovation. This work offers useful theoretical extensions and methodological approaches for the study of similar kinds of network technology innovations that are currently being deployed in association with electronic commerce on the Internet.Information Systems Working Papers Serie

RE-ARCHITECTING AND RE-ENGINEERING TRADING AND TREASURY SYSTEMS IN THE MERGER OF CHEMICAL BANK AND MANUFACTURERS HANOVER TRUST -- An Interview with Brian Slater, Vice-President, Chemical Bank

This chapter presents an edited transcript of an interview held in August 1993 with Brian Slater, a vice-president in the Global Bank at Chemical Bank. Slater is responsible for the firm's U.S.-based trading and global risk management systems. The interview was conducted in the context of Project 1990s -- the U.S. Council for International Banking's Study on Information Technology Investment and International Banking Performance. The purpose of the discussion was to develop background information on the issues the bank's senior management team faced in merging the trading and treasury functions of Chemical Bank and Manufacturers Hanover Trust. The new Global Bank faces challenges in the areas of global risk management, cost-effective delivery of in formation technology-based products, trading infrastructure application functionality gaps, and human resource management that can be best addressed by a shift to a new paradigm for trading and treasury application software development: reuse of object-oriented representations of the bank's systems. We now turn to the details of the discussion that develops these themes.Information Systems Working Papers Serie

Appropriating Value From CRS Ownership in the Airline Industry

It is difficult for the firm competing through information technology (IT) resources to gain a sustainable advantage because systems are easy to imitate and often substitute resources are available to competitors. The innovator may be unable to appropriate all of the benefits from IT investments. Airlines have installed computerized reservations systems (CRSs) in travel agencies in order to appropriate the returns from their investments in information technology. The airlines expected to obtain a number of benefits from this strategy including increased efficiency, possible bias in favor of the CRS owner on the part of the travel agent, and fees from other airlines for making reservations for them. The purpose of this paper is to evaluate the appropriation of value by CRS owners from deploying systems in travel agencies. These benefits, beyond fees from travel agents, should be seen in the vendor airline's market share between cities and in the overall performance of the airline at an industry level. This paper models airline performance as a function of CRS ownership at two levels: for selected city-pairs and at the overall level of the firm. The city-pair analysis employs a multinomial logit (MNL) market share model that analyzes five years of data on 72 city-pair routes. The industry model uses longitudinal data for a panel of ten airlines for twelve years. The results of both analyses support hypotheses that CRS ownership is positively related to airline performance. It appears that strong airlines have appropriated the benefits of their CRSs, turning them into highly specialized assets for further travel-related innovation. This work offers useful theoretical extensions and methodological approaches for the study of similar kinds of network technology innovations that are currently being deployed in association with electronic commerce on the Internet.Information Systems Working Papers Serie

RE-ENGINEERING TRADING AND TREAS~]RY OPERATIONS IN INTERNATIONAL FINANCIAL SERVICES

Maximizing business value of investments in hardware, software and te]ecommunications technologies that occur in the trading and treasury operations of an international bank requires senior management to evaluate the extent to which the technology infrastructure enables the bank to perform a number of key hnctions. These include: formulating effective trading strategies, pricing financial instruments accurately and rapidly, being able to respond to changing market conditions, processing transactions cost-effectively, resolving inquiries quickly, and moving to support emerging corporate treasury products. After a decade of rapid growth in investment levels, senior managers now emphasize refining, rationalizing and integrating trading and treasury technology architectures to support improved global financial risk management, better capital utilization, and higher transaction volumes. This chapter examines how senior managers can accomplish these goals by re-engineering pre-trade, trade execution and post-trade business processes. It presents a framework that utilizes basic concepts from management science and microeconomics to illustrate the variety of impacts that re-engineering can have on improving firm revenues and controlling or reducing costs. It also presents a series of manageria

APPROPRlABlLlTY AND THE INDIRECT VALUE OF CRS OWNERSHIP IN THE AIRLINE INDUSTRY

It is difficult for the firm investing in information technology (IT) to appropriate a1 of the benefits from its investment for itself- it is very easy to imitate innovations in IT. Airlines have installed computerized reservations systems (CRSs) in travel agencies in order to appropriate the returns from their investments in information technology. The airlines expected to obtain a number of benefits from this strategy including increased efficiency, possible bias in favor of the CRS owner on the part of the travel agent, and fees from other airlines for making reservations for them. The purpose of this paper is to evaluate the impact of the indirect (non-fee) benefifs to CRS owners from deploying systems in travel agencies. These indirect benefits should be seen in the vendor airline's market share between cities and in the overall performance of the airline at an industry level. This paper models airline performance as a function of CRS ownership at two levels: for selected city-pairs and at the overall level of the firm. The city-pair analysis employs a multinomial logit market share model using five years of data on 72 routes. The industry model uses longitudinal data for a panel of ten airlines for twelv