Thursday, June 25, 2009


Kindle is the wireless reading device that Amazon is bringing on the US market.

As a fanatic reader (and with more time to read during my visiting scholarship at MIT) I recently bought the Kindle. The Kindle is wireless connected to the Amazon Kindle web site and in the US you can download books, newspapers, magazines, and blogs. For wireless downloading (only in the US yet) you need to have an US address and an US credit or debit card. The first experiences are very positive: great reading experience, easy to use, fast downloading, extra functionalities like the text-to-speech feature, the use of the dictionary, and the 9.99 dollar per book download. Let's see how I am going to use it the coming weeks. Keep you informed.

MIT Sloan CISR Summer Session

Great sessions and great interactions with an active group of CIOs and researchers during a series of five one-day workshops: that is the MIT Sloan CISR Summer Session 2009 (June 15-19, 2009). Five topics were discusssed: 1. IT Governance; 2. Enterprise Architecture; 3. IT Risk Management; 4. The IT Savvy Firm; and 5. IT-Enabled Change. Guest CIO speakers were: Diane Bryant (Intel); Yury Zaytsev (Swiss Re), Joe Antonellis (State Street), Per-Ake Tobiasson (Tetra Pak), and John Glaser (Partners Healthcare). CISR is the Center for Information Systems Research at MIT Sloan School of Management.

Standard Battles

Setting the standard is an important strategic asset. For example, if the Dutch would have been able to enforce the Dutch language to the rest of the world, for most of us it would be more difficult to communicate (unless you learned Dutch).

Fortunately for the non-Dutch, the Dutch are not able to do that anymore. (They had a chance around the 1640s - but decided to concentrate on the Dutch East India Company (and not the Dutch West India Company) and therefore lost control over Brazil in the Second Battle of Guararapes (1649) and later also lost control over Manhattan in 1664. Otherwise Brazil and the US would have spoken Dutch!

Geerten van de Kaa investigated Standards Battles for Complex Systems in the setting of home networks.

Home networks combine components and technologies from the consumer electronics industry, the information technology industry, the telecommunications industry, and the home automation industry. Irrespective of the fact that the home network has been technically possible for many years, it has not become a practical reality. A major reason is the lack of generally accepted common standards. In this dissertation we develop a framework with which we can explain and predict which standard will have the highest chance of achieving dominance. We applied the framework to several standards battles and it appeared that it can be used to explain these standards battles better, when compared to existing frameworks in the literature. We applied a multi-attribute utility approach to standard selection and provide a first indication of weights for factors. Also, we have studied two factors in depth: the diversity in the network of actors that support a standard; and the flexibility of the standard. We provide a first indication that these variables influence standard dominance positively and reinforce each other.

Risks, Real Options, and IT Projects

Project managers of IT projects are trying to find the right balance between analyzing risks and building flexibility in the project. Cokky Hilhorst did fundamenal research on this topic. She defended her dissertation "Reacting to Risks with Real Options: Valuation of Managerial Flexibility in IT Projects" very successfully at Tilburg University.

This dissertation investigates how managerial flexibility, as a response to risks, impacts IT project valuation. The dissertation attempts to answer this question by conducting three separate studies using a real options perspective. Firstly, we explore whether managerial flexibility in IT investment decisions is recognized in practice by conducting exploratory case study research. Secondly, we investigate how managerial flexibility in IT projects can be valued. We develop a theoretical decision-making model which deals with both financial and non-financial IT project valuation criteria and apply the model in a case study. Thirdly, we take a qualitative perspective on the management of managerial flexibility in relation to IT project risk. We empirically test the effects of specific risks on the valuation of real options in IT project decisions in an experimental setting. The primary contribution of this dissertation is to provide evidence that managers differentially assess the relative value of different types of options when controlling IT project risks. The relative value that IT professionals place on various real options is both driven by both the intrinsic real options value and by risk factors associated with an IT project. Their assessment generally follows real options-based risk management reasoning.

Theory of Informedness

New technologies such as mobile phones and smart cards provide more and detailed information about customers. Customers on the other hand are using web-technologies that enable them to get far detailed information about the offerings of firms. Ting Li defended in an excellent way her PhD dissertation entitled "Informedness and Customer-centric Revenue Management".

The dissertation proposes new theoretical perspectives – firm informedness, customer informedness, and informedness through learning – to re-conceptualize the decision making process of customer-centric revenue management. It consists of three studies. First, using multiple cases in which firms adopt smart cards and mobile technologies in America, Europe, and Asia, Ting Li examines the value creation process of the firm using the explanation of firm informedness and investigate how it advances revenue management. Second, she tests the theory of consumer informedness and examine heterogeneity in consumer preferences using stated choice experiments. She finds the evidence for trading down and trading out behavior and shows that the use of mobile ticketing technologies can help firms to build a hyper-differentiated transport market. Finally, using a computational simulation, Ting li explores the opportunity for devising service offerings to capture profitable consumer responses, considering demand-driven revenue and capacity-management. Overall, this research introduces methods, models, and guidelines for organizations to strategize the informational challenge, make informed decisions, and create transformational values to win in today’s competitive network environment.