Measuring Gains in Operational Efficiency from Information Technology: A Study of the Positran Deployment at Hardee'S Inc.

This paper presents a new approach to measuring the input productivitygains from information technology (IT) in complex managerial environments. Theapproach is illustrated in the context of a study of a pilot deployment at Hardee's Inc.of a new cash register point-of-safe and order-coordination technology called “Positran."The method employs data envelopment analysis (DEA) and nonparametricproduction frontier hypothesis testing to determine whether the performance ofrestaurants that have deployed Positran is better, on average, than for those that havenot. The design of the study is of special interest because it approximates a controlledexperiment. Our results show that Positran helped to reduce input materials costs, sincerestaurants that deployed the technology were less likely to be inefficient It is furtherpossible to characterize the class of restaurants for which the relationship holds.Operational efficiency measures such as the ones we have developed provide managerswith the opportunity to implement deployment strategies for new ITs in order tomaximize value.