On the Economies of Scale and Budget Allocations in Information Technology Services Provision

Date
2018-01-03
Authors
Mithas, Sunil
Han, Kunsoo
Krishnan, M.S.
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Abstract
This study reexamines some fundamental questions in the network era of computing using the data after 1995 when firms have made significant investments in newer types of IT systems. Our findings suggest that firms realize some economies of scale in IT services as they grow in size. We also find that the personnel-hardware ratio is not independent of IT budget. Finally, we find that personnel-hardware ratio was declining during 1999-2003 period in response to changes in factor prices of hardware and personnel. We discuss implications of these results for academic research and for managerial practice.
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Strategy, Information, Technology, Economics, and Society (SITES), IT budget, production function, economies of scale, personnel-hardware ratio
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10 pages
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Proceedings of the 51st Hawaii International Conference on System Sciences
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Attribution-NonCommercial-NoDerivatives 4.0 International
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