Strassmann, formerly the chief information officer at both Xerox and the Pentagon, presents his analysis with the zeal of a convert. He challenges the idea that U.S. corporate investment in computing has generated appropriate returns and flays "best-practice" information technology departments as shams. He tests the core of the arguments driving IT, only to hear the echoes of hollow claims. When he scrapes away the muck from the accepted methodologies and trims some of the statistical assumptions, he finds that executives' faith in information technology has cost U.S. business tens of billions of wasted dollars.

Not only does Strassmann find no demonstrable relationship between spending on computers and corporate profits, but he also rejects recent findings that computers have finally begun to boost the economy's productivity. He argues that the recent rise in revenue per employee is more likely a reflection of outsourcing than of gains attributable to computerization.

Anyone who has gone through Economics 101 and a basic statistics course will find Strassmann's math a provocative and welcome antidote to popular media coverage, which regularly attributes 1,000% returns to intranet investments. On a micro level - even on an industry wide level - it is inarguable that some companies get strong returns on their digital investments. What seems true, however, is that on a macro level more money has been wasted on computerization than has been created by it.

No one denies - including Strassmann - that computerization and creative networking can add enormous value. But when we look at the numbers, it is clear that companies are not basing their computer investments on careful calculations of returns or added value. Other factors such as culture, politics, fashion, and competition also come into play. Strassmann persuasively argues that best-practice methodologies often are irrelevant benchmarks for many companies investing tens or hundreds of millions of dollars in computers and networks.

As for the popular trend of IT outsourcing, Strassmann argues that it is more an instrument for downsizing than a process for adding value. He has found that companies with consistently large profits and rising employment have not outsourced most of their information technologies, despite the supposed benefits of synergy or the advantages of getting rid of commodity work. The only companies that have outsourced information technologies are those that are shrinking anyway.

For every success story - for every Federal Express and SABRE - just how many IT failures have arisen from popular delusions about computers? For every large-scale project that has been implemented successfully, how many have been canceled or have ended inconclusively? The answers are chilling, as Strassmann shows in his extrapolations from survey data about failed software projects.

Indeed, employees can misuse computers in a number of ways. How many times can people revise a word-processing document, manipulate a spreadsheet, or polish a presentation before they hit the point of diminishing returns on their time? Is productivity really increased in this context? When you multiply all those diminishing returns by the tens of thousands of personal computers in a large company, what is the real value-to-waste ratio?

Strassmann doesn't treat these questions as hypothetical. Precisely because his perspective on the diffusion of technology is more statistical than anecdotal, his numbers have a credibility that the Information Age prophets frequently lack.

Moreover, it would be wrong to dismiss Strassmann as a cynic or a corporate neo-Luddite. On the contrary, he comes off as a wounded idealist. He appreciates the potential of information technology but simply refuses to ignore what happens when managers misuse that potential. Strassmann's implicit message is that the profitable use of technology does not begin with a better understanding of digital media; it comes with a better understanding of the organizations that use them.