Beyond IT and Productivity : Effects of Digitized Information Flows in Grocery Distribution

Abstract: During the last decades organizations have made large investments in Information Technology (IT). The effects of these investments have been studied in business and academic communities over the years. A large amount of research has been conducted on the relation between the investments in IT and productivity growth. Productivity is a central measure of national and organizational success and is often considered in economic decisionmaking. Researchers have however found it difficult to present a clear-cut answer to the effect of IT investments on productivity growth; an inability defined as the productivity paradox.Within the Impact of IT on Productivity (ITOP) research program the relevance of the productivity measure as an indicator of the value of IT is questionned. IT has over the years replaced physical interfaces with digital and in this way enabled new ways to process information. A retrospective research approach is therefore applied where the effects of digitized information flows are studied within specific organizational settings.In this thesis the effects of digitized information flows within Swedish grocery distribution are studied. A comprehensive presentation of the development is first conducted and three focal areas are thereafter presented. These describe supply chain information flows including order information, information on new items and analysis of point-of-sales information. The presentation of the focal areas identifies a number of effects from the digitization of information flows. The effects are analyzed according to a predefined analytical framework. The effects are divided into five categories and are thereafter evaluated when it comes to potential for generating value.The study shows that the digitization of information flows has generated numerous, multifaceted effects. Automational, informational, transformational, consumer surplus and other effects are observed. They are difficult to evaluate using a single ndicator. Specific indicators that are closely related to the effects can however be defined. The study also concludes that the productivity measure does not capture all positive effects generated by digitized information flows.