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Discussion of impact of information technology on public accounting firm productivity.

Article Excerpt
I. INTRODUCTION

I am grateful for the opportunity to discuss Banker et al. (2002) (hereafter "the paper" or BCK). This paper undertakes an important research question; what is the benefit to public accounting firms of implementing audit software and information and knowledge-sharing applications (ASIKSA)? This paper has an excellent research design in that using a single firm over time controls for many possible confounding effects from using cross-sectional data. In addition, having substantial access to the research site allows for a triangulation approach, using qualitative and quantitative data to address the same research question.

An important contribution of this paper is its exposure of Data Envelopment Analysis (DEA) to a wide audience. DEA provides a method for analyzing multiple inputs and multiple outputs to determine efficiency. Most information technology (IT) research questions involve multiple inputs such as technical IT skills, IT infrastructure, other IT resources and capabilities, and other factors of production. New IT often results in multiple outputs such as improved decision making and timeliness of reporting, increased and broader information availability, increased productivity, and increased profitability. Traditional techniques restrict researchers to a single output and only a few inputs. DEA can expand the value of IT research by adding other relevant inputs and outputs. Despite the paper's numerous contributions, I do have some questions regarding the research question, methodology, and conclusions, which I address in the following section.

II. DISCUSSION

Research Question

Papers published in the mid-1990s show that IT can result in increased efficiency (e.g., Brynjolfsson and Hitt 1995, 1996; Dewan and Min 1997; Hitt and Brynjolfsson 1996; Lichtenberg 1995). What the literature has yet to conclusively demonstrate is how to turn IT spending into profitable, competitive-advantage-granting investments.

The strategic management literature tells us that for strategic actions to lead to a sustained competitive advantage, they must be value-creating, different from what competitors are doing, and prohibitive to copy (Mata et al. 1995; Bharadwaj 2000). BCK state that their analysis demonstrates "the value...

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