sealPurdue Business, Finance, Technology Briefs

August 2000

Purdue, IBM, Dassault Systemes create
a digital enterprise center

WEST LAFAYETTE, Ind. – Purdue University, IBM and Dassault Systemes in June announced a collaborative alliance to create a digital enterprise applied-research center in the School of Technology on the university's West Lafayette campus.

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The research center, a $6 million project, will be part of a working model of the digital enterprise, the framework that enables manufacturers to manage their extended enterprise through a complete e-business environment, from product concept and production to customer delivery and support. The digital enterprise makes it possible for companies to create, manage, simulate and communicate digitally all of the information related to products, processes and resources.

Through the use of applied research, this innovative laboratory, located in the Knoy Hall of Technology, will educate both academia and industry in the study and development of the digital enterprise. As students learn practical problem-solving techniques, they will simultaneously help improve industry's ability to develop new methodologies and software tools for the future, said Gary Bertoline, a Purdue professor and head of the Department of Computer Graphics.

"The research center will give Purdue students a competitive advantage in the job market by preparing them to be the leaders in the implementation of the digital enterprise," Bertoline said.

The center will also provide an environment for demonstrations, instruction and training for IBM's and Dassault Systemes' customers, business partners and employees. Corporations will benefit by participating in collaborative projects specific to their needs, which in turn will provide them with graduates, co-ops and interns capable of contributing to the implementation of their digital enterprise and e-business initiatives.

CONTACT: Bertoline, (765) 494-4585; Gentry, (765) 494-2552;

NOTE TO JOURNALISTS:  A color photo of a Purdue student working in Purdue's digital enterprise center is available at the News Service Web site. It's called Gentry.lab

Past performance may predict future investment results

WEST LAFAYETTE, Ind. — The standard mutual fund legal disclaimer notwithstanding, past performance may indeed predict future results, according to a recent study by two finance professors.

Raghu Rau, an assistant professor of management at Purdue University's Krannert Graduate School of Management, says both the individual investor and the mutual fund manager "consistently underreact to important corporate events that have long-term effects on companies' financial future and investors' returns."

This was borne out in a study Rau and Padma Kadiyala, an assistant professor of finance at the Cox School of Business at Southern Methodist University, undertook.

Here is the market dynamic they developed:

ABC Corp., rolling along with good sales, profits and market share, announces that it will earn 35 cents a share rather than the 30 cents analysts predicted. Investors should buy more shares. But they tend not to do that.

XYZ Corp., on the other hand, has seen things go badly in the past few years and announces it will lose 35 cents a share rather than the 30 cents analysts predicted. Investors should sell their shares. But they tend not to do that.

These are investor underreactions.

The professors came to their conclusions by analyzing four types of firms that announced major financial initiatives and comparing them to a benchmark portfolio of companies of similar size, financial fundamentals and stock movement (momentum).

"There are policy implications for investors, whether they are on Wall Street or Main Street," Rau says. "Look at the past history of a company's stock. History tends to repeat itself. Past performance tends to be a good predictor of future performance."

CONTACT: Rau, (765) 494-9658;

Management education has seen the future,
and it's wireless

WEST LAFAYETTE, Ind. — Graduate students at Purdue University's Krannert Graduate School of Management can do research on the Krannert and library networks, check their e-mail, or surf the Internet not only on the benches and lawn outside in the building. They also can work on team projects in the building's larger, open lobby, known as the Drawing Room.

Classrooms in the Krannert Building have also been being wired without wires.

The introduction of wireless networking dovetails nicely with Purdue's engineering heritage and Krannert programs' emphasis on computer technology, according to network administrator Jerry Brower. "We have a reputation as a techno-business school, so our students have expectations of a high-technology information environment."

The broadband, high-speed wireless technology only became available in the last year, according to Michael Sinnott, director of Krannert's Computing Center information technology applications.

The implementation of state-of-the-art wireless technology owes a debt to the past, though. "We wanted to expand students' usable workspace, but to install wired network connections in our 40-year-old building would have cost about $1,000 per computer connection," Sinnott said.

"Our master's degree students in particular have a heavy reliance on technology — Excel, PowerPoint, Microsoft Word, calendaring and e-mail. We realized that a computer lab was not a suitable place for breakout space or to do team projects or group work. We found that wireless in the Drawing Room offered a more natural, conference-room type of environment.

"This changes where and how students work," Sinnott said. "Our philosophy is to make it available and let it grow."

In the new Jerry S. Rawls Hall, scheduled for groundbreaking in spring 2001, the classrooms will be wired. Wireless connections are planned for the public areas and even the halls. And professors and students will be accustomed to teaching and learning with online resources ahead of Rawls Hall's 2003 scheduled completion date.

CONTACT: Sinnott, (765) 494-4513,

Answering customer calls the right way

WEST LAFAYETTE, Ind. – In today's competitive marketplace businesses are finding that customer access can make the difference in the consumer's decisions. Customer access centers, whether they are the toll-free telephone numbers or the Web access center, can increase the probability that customers will choose and remain loyal to a business.

Ten years ago businesses looked at the toll-free number as a cost. Today, businesses look at the creation and development of multiple access as an investment in their bottom lines.

A good call center can increase customer loyalty, according to Jon Anton of the Center for Customer Driven Quality in Purdue's School of Consumer and Family Sciences. "Our research shows that a dissatisfied customer who calls a call center and is satisfied with the resolution to a problem, or who gets an answer to a question, is actually more loyal to the brand or company than a customer who never calls and is simply satisfied," Anton says.

Anton says call centers are effective because companies find that keeping customers by solving their problems is cheaper than attracting new customers. "Indeed, our studies have shown that consumers are surprised at the lengths to which companies will go to satisfy them," he says.

The Center for Customer Driven Quality's mission is to bridge the gap between academia and business. It provides research, student education and professional experience, and executive education.

CONTACT: Jon Anton, (765) 494-8357,


Michelle Lane, a junior majoring in computer graphics from Indianapolis, Ind., learns how to electronically manage an entire manufacturing operation using Purdue University's new digital enterprise center, a lab made possible by gifts from IBM Corp. and Dassault Systemes. (Purdue News Service Photo by David Umberger)
A publication-quality photograph is available at the News Service Web site and at the ftp site. Photo ID: Gentry.lab
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Briefs compiled by J. Michael Lillich, (765) 494-2077,

Purdue News Service: (765) 494-2096;

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