An Agent-Based Simulation toward IT Management

    One of the most important issues on the business value from IT these days is to understand the notion of complementary non-IT factors such as business strategies, processes, and organizations. Simultaneously, the corporate IT environment is changing rapidly due to the dramatic proliferation of the Internet and Internet-based technologies in business. These phenomena implicate that both of inside and outside of a company influence business value from IT. Therefore, the key question facing researchers as well as practitioners is how such complementary factors influence IT contribution in the context of electronic commerce and electronic business.
In this paper, we develop an agent-based simulation model to describe how effectively a company creates business value through IT management. In this model, we consider not only IT investment led by corporate senior managers, but also the several complementary characteristics of IT management environment, such as competitiveness of the industry a company belongs to. The objectives here are to observe what kind of influence will be brought to business value of IT. For example, through the agent-based simulation model, we compare the following three conceivable IT investment stances of top managements: IT-driven (pursuing high IT value opportunities taking high risk), Balanced (pursuing middle IT value opportunities taking middle risk), and Non-IT-driven (Strategic/process-driven; pursuing low IT value opportunities taking low risk). Based on the simulation results, we found that for a company in a growth industry, the Balanced stance would capture the most efficient business value from IT in three IT investment stances and that a company in an emerging industry would take the more advantage of IT investment, the more the company focuses on the IT-driven approach, etc. Finally, we discuss and interpret the simulation results considering possible situations of company, competitor, and customer, who are facing the recent Internet era.


Yasuo Kadono
Tsukuba University
Management Science Institute Inc.
kadono@msi21.co.jp