Book Chapter IStheory

2010

This study conceptually develops a Business Value if IT (BVIT) model, conjointly and innovatively using four theoretical frameworks, the Resource-Based View(RBV) of the firm, Knowledge-Based View (KBV), Contingency theory, and the Strategic Alignment Model. The developed model proposes that IT-enabled knowledge and communication capabilities, which actually create IT-enabled economic value (EVIT), can be driven by organizational strategy and resources via their impact on IT strategy and resources. The study contributes to the extant body of knowledge by developing three new IT-driven business value constructs: Know-Tech, Com-Tech, and EVIT along with theoretical grounding and implications about empirical measurements. It is thus suggested that IT-enabled knowledge and communication capabilities mediate the effects of organizational and IT strategies and resources on EVIT, thereby illustrating the paths that lead from IT components to IT-embedded capabilities and to EVIT. The model i...

2004

The research reported in this paper examines how business value is being created and delivered by IT in large private organisations in Australia. The critical organisational governance and management activities and practices that contribute significantly to business value were identified and described, using a process model of as a lens by which CIO statements were organised, understood and interpreted. Broad concepts associated with value delivery were identified, and the key elements of IT governance were then abstracted from these practices. The research also confirmed that a substantial change had been occurring over the past few years, with a rigorous focus on building capabilities and relationships with key business stakeholders apparent, with the deliberate intent of integrating IT investments with business change initiatives, and thus a business-centric focus was replacing what was perceived to have been a largely technological focus of previous years. However, while the broadly defined activities associated with strategy and evaluation were being paid close attention, CIOs were still at times hesitant and grappling with the issues associated with benefits realisation initiatives.

The measurement of information technology (IT) impact on economic performance at the business unit or enterprise level is receiving increased attention. Several researchers approached the problem by calculating key ratios of IT intensity and relating them to key ratios of firm performance. This approach is compared with a more rigorous approach of cost functions based on the microeconomic theory. Both procedures are applied to the same set of data from the banking industry. The results show that reasoning about IT impact based on key ratios may be misleading, especially when the figures are only calculated for a cross-section of data.

2007

Despite growing evidence of a positive impact of Information Technology (IT) investments on firm performance, the variations in the results across organisations are still significant. This research takes a fresh approach by addressing complementarity impacts of organisational practices on three different dimensions of IT business value (ITBV). The goal is to identify important organisational practices and empirically test the synergistic relationships among them and their impacts on different dimensions of IT business value. We implemented an integrative approach to analyse the complex interactions among multiple organisational practices. First, we categorised ITBV into four dimensions based on different management objectives: strategic, informational, transactional and organisational transformation. Second, organisational configuration for each ITBV dimension is identified using regression trees. Third, a formal complementarity test was performed on each configuration pattern. Our findings indicate that the set of organisational practices affecting each dimension of ITBV is different. Hence, IT complementary factors that affect particular dimensions of ITBV do not necessarily have the same effect on other dimensions.

1995

The business value of information technology (IT) has been debated for a number of years. Some authors have found large productivity improvements attributable to computers, as well as evidence that IT has generated substantial benefits for consumers. However, others continue to question whether computers have had any bottom line impact on business performance.

International Journal of Productivity and Performance Management, 2019

Purpose The purpose of this paper is to measure the business value of IT (BVIT) and illustrate the relationship between IT practices and BVIT. Design/methodology/approach The paper uses a case study approach to collect the subject firm data over a period of one year. The data are about various IT systems used in the firm and their associated capital and operational cost components. The derived data are then compared with industry benchmarks. Findings The IT practices employed by the firm enable it to achieve a BVIT which is higher than the industry norm, from both strategic and operational perspectives. Research limitations/implications In this study, a year’s worth of data from a single firm is considered. The temporal frame of the research data limits the generalization of the results. To improve the generalizability, data from many years and across many firms may be used. Practical implications The paper provides insights to managers to identify the measures of BVIT. Further, man...

International Journal of Business, Humanities and Technology, 2020

This article continues the discussion examining IT's contribution on firm performance. Byrnjolfsson (1993) identified what is known as the "productivity paradox" and posited a number of reasons for it. Carr (2003) added fuel by suggesting IT is ubiquitous and provides no significant firm advantage. This study does identify that industry type and size matters. Utilizing the position of CIO, or similar, as a proxy for IT emphasis, the study finds that non-IT intensive organizations, with annual sales less than $101million do achieve performance advantages over firms without an IT emphasis. The implication being that the debate is far from over.

sdaw.info

The research reported in this paper examines how business value is being created and delivered by IT in large private organisations in Australia. The critical organisational governance and management activities and practices that contribute significantly to business value were identified and described, using a process model of Soh and Markus (1995) as a lens by which CIO statements were organised, understood and interpreted. Broad concepts associated with value delivery were identified, and the key elements of IT governance were then abstracted from these practices. The research also confirmed that a substantial change had been occurring over the past few years, with a rigorous focus on building capabilities and relationships with key business stakeholders apparent, with the deliberate intent of integrating IT investments with business change initiatives, and thus a business-centric focus was replacing what was perceived to have been a largely technological focus of previous years. However, while the broadly defined activities associated with strategy and evaluation were being paid close attention, CIOs were still at times hesitant and grappling with the issues associated with benefits realisation initiatives.

Journal of Management …, 2000

Proceedings of the Thirty-First Hawaii International Conference on System Sciences

Even though expenditures by corporations for information technology, now at all-time high levels, continue to grow, concerns remain over the inability of firms to measure the business value they receive for their investment. Since the level of expenditures is not expected to fall, it can be assumed that, measurable or not, managers believe they are getting satisfactory returns for their spending on information technology. To gain greater insight into the business value of IT, a study involving 146 highly experienced executives and managers was conducted. The results identify and measure the intensity of managers' insights into the forces that influence a company's achievement of business value from its IT investments.

Since the ongoing proliferation of information technology (IT) in our private and professional lives, researchers have been concerned with the conceptualization and measurement of the " value " that technology brings us. To this end, researchers have based their assumptions and theories on the technological achievements and perceptions of technology at that time. Ever since the introduction of smart phones, broadband Internet, and social networks, much has changed in the way we perceive and appropriate IT value. In order to identify possible white spots for future research, we present a systematic literature review of the past 10 years of research in this area. In doing so, we develop a taxonomy for analyzing the IT value literature. The results of our analysis indicate that the majority of current work focuses on ex post measurement of the monetary value of IT for businesses. Only a few articles were found that employed an alternative lens in defining IT value. With the blurring boundaries between private and professional life, these approaches become increasingly more important. We discuss the general implications of our findings with a view to possible new themes for the next years of research.

1988

Information technology (IT) is essential to many businesses, but there are few guidelines for determining the adequate level of investment in IT. The purpose of this paper is to further understanding of the mechanism of I T investment. Previous studies on I T investment are briefly presented. The authors performed six-mini case studies of large companies in five different industries; these studies addressed the questions of how firms define IT and how they manage their investment in IT. Our goal was to formulate a model of the relationship between I T investment and organizational performance. We present the model and pose questions for investigating this important relationship more closely. Findings of interest relate to the definition of IT, the importance of political considerations, the concept of a n industry-based threshold investment, the conversion effectiveness of IT investment, and the concept of productive capacity. The most important finding relates to the separation of different types of I T investment and their logical matching to particular performance measures.

Journal of Advances in Management Research, 2005

Since the amount spent on information technology (IT) keeps on increasing with time, senior management is rightly concerned with the evaluation of their capital investments in IT. However, despite significant progress in evaluating the productivity impacts from corporate investment in IT, the inability of traditional economic measures to fully account for intangible impacts has led to for calls for a more inclusive and comprehensive approach to measuring IT business value. This paper goes beyond the notion of improving evaluation based on measurement improvements and shows that there are limits to obtaining accurate benefit and cost figures. This paper is premised on the belief that IT investments do lead to increased business value. However, for an organization to experience such increased business value, efforts have to be made to control investments and heedfully take steps to leverage IT resources. Evaluation, therefore, has to take on a continuous characteristic. Amongst the issues discussed in this paper are the relationship between the comprehensiveness of IT investment evaluation and their effects on realized returns on IT investment by an organization, executives' perceptions about the various aspects of IT investment evaluation (costs, benefits, risks and evaluation methodology). In this study perceptual measures, as reported by IT managers, have been used to assess payoffs from IT investment. This provides an added advantage in that, unlike traditional economic measures, perceptual measures can be used to evaluate both tangible and intangible impacts. These measures include the importance and level of difficulty in measuring costs, benefits and risks and desirable features of a good IT evaluation methodology. To establish the relationship between extensiveness of IT investment evaluation and the returns on IT investment, causal model analysis has been done using structural equation modeling. The main finding is that increased attention to risks in IT investment evaluation leads to better investment control, which, in turn, results in a higher realized return on IT investment by the organization.

americas conference on information systems, 2006

Research on information technology (IT) business value posit complex relationships from either a resource based view (RBV) or transaction cost economics (TCE) viewpoint. In contrast with the rich theoretical work, empirical studies have taken a ' black box' approach, testing relatively simple models. In this study, we integrate the theoretical and empirical work into a unified model of IT value.

The IT services structure opens the possibility for a number of studies aimed at determining the value of IT investments. Previous studies have not had much success in establishing a link between IT investments and firm performance. Much of this may be due to the presence of risky IT projects that consume a large portion of the budgets . The use of IT services, however, could serve as good indicators of the extent of IT within an organization while searching for the value links thought to be present. Lastly, services can be aligned to the stra-tegic intent of an organization as viewed by different stakeholders. In this fashion we can study the viewpoints of different groups in their pursuit of firm success. The contingencies that may be found could provide a good indica-tor of the differences between information professionals and general management.