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  • February 1991
  • Case
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Burlington Northern: The ARES Decision (A)

By: Julie H. Hertenstein and Robert S. Kaplan
  • Format:Print
  • | Language:English
  • | Pages:26
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Abstract

Burlington Northern's decision whether to invest in ARES, an automated train control system, is a ($350 million) strategic investment in information technology. Although set in a service industry (railroad) the issues around this decision arise in many organizations and require the company to analyze the project from many perspectives. ARES offers the potential to change the basis of competition in the industry through technology. The company must consider the value, if any, of being first in the industry to adopt a technology; the potential impact on customer services, quality, and reliability; and the role and value of information systems technology. Burlington grapples with how to quantify both tangible and intangible benefits, and deliberates whether investments that yield improvement in hard-to-quantify factors such as reduced delivery time and improved service reliability can be subjected to the same financial scrutiny as equipment replacement decisions such as new locomotives. Demonstrates thoughtful, creative approaches to measuring hard-to-quantify benefits.

Keywords

Investment; Rail Transportation; Information Technology; Competitive Strategy; Performance Evaluation; Performance Effectiveness; Cost vs Benefits; Technology Adoption; Technological Innovation; Customers; Quality; Rail Industry

Citation

Hertenstein, Julie H., and Robert S. Kaplan. "Burlington Northern: The ARES Decision (A)." Harvard Business School Case 191-122, February 1991.
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About The Author

Robert S. Kaplan

Accounting and Management
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Related Work

    • February 1991
    • Faculty Research

    Burlington Northern: The ARES Decision (B)

    By: Julie H. Hertenstein and Robert S. Kaplan
    • January 1993
    • Faculty Research

    Burlington Northern: The ARES Decision (B), Abridged

    By: Robert S. Kaplan
Related Work
  • Burlington Northern: The ARES Decision (B) By: Julie H. Hertenstein and Robert S. Kaplan
  • Burlington Northern: The ARES Decision (B), Abridged By: Robert S. Kaplan
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