An application of the learning curve and the nonconstant-growth dividend model: IT investment valuations at Intel® Corporation

Authors:
Shana Dardan;Doug Busch;David Sward
Affiliations:
Intel Corporation, United States and California State University at Sacramento, United States;VP of IT and CIO, Intel Corporation, United States;Intel Corporation, United States and Arizona State University East, United States
Venue:
Decision Support Systems - Special issue: Economics and information systems
Year:
2006

Citing 3
Cited 2

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Abstract

Technology benefits last years longer than the standard ROI valuation analysis but are rarely enumerated. In this paper, we utilize a nonconstant dividend growth model to ''capture'' lasting marginal productivity gained through the ''reinvestment'' of labor capital rather than the standard the one-time gain of reducing the labor force to realize labor productivity gains. This innovative methodology for capturing the productivity value of maintained employees enables the valuation of continuing marginal productivity gains and the management of workload for the affected employees at Intel. This methodology is applied to the valuation of a standard operating system and hardware upgrade.