BUS 237 Chapter Notes - Chapter 3: Bell Canada, Information Technology Management, Profit Margin

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CH.3 – Productivity, Innovation, and Strategy
Q1: Why should I care about productivity an innovation?
- (labour) productivity = ratio of Canadian GDP/total paid hrs worked by Canadians
 ~$35/hr
 primary indicator of our per capita income
 increasing labour prod. best measure of Canada’s future growth
 except Canada not doing well in increasing labour prod.
- 1950-1975: 4% avg annual labour prod. growth in Canada
- 1975-2000: 1.6% and declining since
- increasing prod. not about working harder/spending more hrs working
 about working SMARTER
 ability of country to innovate & adapt to changing economic conditions
- to enhance, Canada must foster culture of innovation, open industries to more competition & increase amount
of machinery & equip (M&E) in economy
- productivity paradox: how IT adds to productivity, how can create business value
 businesses pour large amounts of $$$ in info tech, but no effect on prod.
- measurement error may be critical reason for observed lack of productivity from IT investments
 IT hard to measure b/c has intangible benefits
- 3 diff ways thru which value of IT can be realized:
1) IT allows company to create more and/or better output from same inputs & create outputs faster
before technology was in place
 eg. investing in IT can allow small accounting firm to add more customers, automate basic tasks
& provide more up-to-date info
2) IT can alter the way corporations compete
 eg. when one accounting firm invests in IT, often rivals will too, compete on software they offer
& technical support they can provide
 eg. video rental industry: IT enabled rent movies @ home, eliminate need to drive to store, indus
changed b/c tech changed structure of competition
3) IT helps make processes more efficient & changes nature of competition
 eg. accounting firm may offer clients more services & lower prices on services after investing in
 consumer, not provider, often reaps benefits of IT
- don’t invest in tech b/c everyone else doing it (“technology for technology’s sake”)
- successful orgs need to understand specifically what business value they are seeking & how IT can help secure
that value
Q2: What is business technology management (BTM), and how is it related to productivity and
- ICT indus sector considered to be important indus for productivity & innovation b/c incl tech that can enhance
indiv & org productivity across many industries
 referred to as “invisible” b/c does not produce as many direct outputs
- ICT sector indirectly supports activities in other industries w/ tools that make these other indus more
- jobs that combine business & tech will be in high demand in future
 need students w/ these skills so Bell Canada founded Canadian Coalition for Tomorrow’s ICT Skills
(CCICT) in 2007
- CCICT designed set of learning outcomes for new program
 Business Technology Management
 after learning outcomes defined, unis across Canada dvlping programs for BTM (business & tech
training, financial accounting, IT infrastructure, etc)
- BTM programs designed for students inspired to use technology to change the way the world does business
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