The Relationship Between Investment in Information Technology and Firm Performance

The Relationship Between Investment in Information Technology and Firm Performance

Author: Peter Weill

Publisher:

Published: 1992

Total Pages: 51

ISBN-13:

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Book Synopsis The Relationship Between Investment in Information Technology and Firm Performance by : Peter Weill

Download or read book The Relationship Between Investment in Information Technology and Firm Performance written by Peter Weill and published by . This book was released on 1992 with total page 51 pages. Available in PDF, EPUB and Kindle. Book excerpt:


The Relationship Between Investment in Information Technology and Firm Performance in the Manufacturing Sector

The Relationship Between Investment in Information Technology and Firm Performance in the Manufacturing Sector

Author: Peter Weill

Publisher:

Published: 1990

Total Pages: 210

ISBN-13:

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Book Synopsis The Relationship Between Investment in Information Technology and Firm Performance in the Manufacturing Sector by : Peter Weill

Download or read book The Relationship Between Investment in Information Technology and Firm Performance in the Manufacturing Sector written by Peter Weill and published by . This book was released on 1990 with total page 210 pages. Available in PDF, EPUB and Kindle. Book excerpt:


The Mediating Effect of Innovation on the Relationship Between Information Technology Investments and Firm Performance

The Mediating Effect of Innovation on the Relationship Between Information Technology Investments and Firm Performance

Author: Erastus Karanja

Publisher:

Published: 2011

Total Pages: 512

ISBN-13:

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The last couple of decades has witnessed a plethora of research studies addressing the cause-and-effect relationship between Information Technology (IT) investments and performance at the firm level. These studies elicited mixed results between IT investments and performance which led to various points of view from IT Scholars and Practitioners. Recently, though, there is an emerging consensus that IT investments do augment the performance of the firm, albeit indirectly. However, there seems to be a dearth of research studies investigating the underlying mechanisms through which IT investments impact specific business processes to spur the agreed performance differentials. In response to calls for research that investigates the business processes impacted by IT investments, this study examines the underlying mechanisms through which IT investments influence innovation that in turn leads to improved firm performance. Since firms do not operate in isolation, and also because one business process has the potential to complement or suppress another, the study includes specific firm factors, namely debt ratio, growth potential, and firm size, as well as environmental factors such as market concentration ratio, diversification, and environmental uncertainty, and examines how these control factors impact innovation and, ultimately, firm performance. A set of hypotheses grounded in the knowledge-based view and the resource-based view theories of the firm is generated and empirically tested in a sample of 441 firms in the manufacturing industry, using a unique dataset that comprises IT investments data from InformationWeek 500, patents data from United States Patents and Trademark Office, as well as financial and market data from Research Insight (COMPUSTAT). Both hierarchical linear regression and mediated regression models are used to analyze the data; and after controlling for variations in specific firm and environmental factors, the empirical analysis yielded significant relationships between IT investments and innovation, and innovation and firm performance. Also, specific firm factors such as debt ratio and firm size, and environmental factors, namely, diversification and market concentration ratio, were found to be significantly related to innovation. However, and contrary to expectations, IT investments was found not to be significantly related to either of the measures of firm performance, namely, Tobin's Q and Return on Sales. These results highlight the indirect, though positive, role of IT investments in firm performance and reiterate that IT investments should be embedded and integrated in the business processes to spur firm performance differentials.-- Abstract.


Book Synopsis The Mediating Effect of Innovation on the Relationship Between Information Technology Investments and Firm Performance by : Erastus Karanja

Download or read book The Mediating Effect of Innovation on the Relationship Between Information Technology Investments and Firm Performance written by Erastus Karanja and published by . This book was released on 2011 with total page 512 pages. Available in PDF, EPUB and Kindle. Book excerpt: The last couple of decades has witnessed a plethora of research studies addressing the cause-and-effect relationship between Information Technology (IT) investments and performance at the firm level. These studies elicited mixed results between IT investments and performance which led to various points of view from IT Scholars and Practitioners. Recently, though, there is an emerging consensus that IT investments do augment the performance of the firm, albeit indirectly. However, there seems to be a dearth of research studies investigating the underlying mechanisms through which IT investments impact specific business processes to spur the agreed performance differentials. In response to calls for research that investigates the business processes impacted by IT investments, this study examines the underlying mechanisms through which IT investments influence innovation that in turn leads to improved firm performance. Since firms do not operate in isolation, and also because one business process has the potential to complement or suppress another, the study includes specific firm factors, namely debt ratio, growth potential, and firm size, as well as environmental factors such as market concentration ratio, diversification, and environmental uncertainty, and examines how these control factors impact innovation and, ultimately, firm performance. A set of hypotheses grounded in the knowledge-based view and the resource-based view theories of the firm is generated and empirically tested in a sample of 441 firms in the manufacturing industry, using a unique dataset that comprises IT investments data from InformationWeek 500, patents data from United States Patents and Trademark Office, as well as financial and market data from Research Insight (COMPUSTAT). Both hierarchical linear regression and mediated regression models are used to analyze the data; and after controlling for variations in specific firm and environmental factors, the empirical analysis yielded significant relationships between IT investments and innovation, and innovation and firm performance. Also, specific firm factors such as debt ratio and firm size, and environmental factors, namely, diversification and market concentration ratio, were found to be significantly related to innovation. However, and contrary to expectations, IT investments was found not to be significantly related to either of the measures of firm performance, namely, Tobin's Q and Return on Sales. These results highlight the indirect, though positive, role of IT investments in firm performance and reiterate that IT investments should be embedded and integrated in the business processes to spur firm performance differentials.-- Abstract.


It Investment and Firm Performance in U.S. Retail Trade

It Investment and Firm Performance in U.S. Retail Trade

Author: Mark E. Doms

Publisher:

Published: 2015

Total Pages: 0

ISBN-13:

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We examine the relationship between investments in information technology (IT) and two measures of retail firm performance: labor productivity and productivity growth over the 1992 to 1997 period. We use untapped firm and establishment micro data from the Censuses of Retail Trade and the Assets and Expenditures Survey. We show that large firms account for most retail IT investment, employment and establishment growth. We find evidence of a significant relationship between IT investment intensity and productivity growth. We found no evidence of a similar link between IT and growth in the number of establishments operated by retail firms.


Book Synopsis It Investment and Firm Performance in U.S. Retail Trade by : Mark E. Doms

Download or read book It Investment and Firm Performance in U.S. Retail Trade written by Mark E. Doms and published by . This book was released on 2015 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine the relationship between investments in information technology (IT) and two measures of retail firm performance: labor productivity and productivity growth over the 1992 to 1997 period. We use untapped firm and establishment micro data from the Censuses of Retail Trade and the Assets and Expenditures Survey. We show that large firms account for most retail IT investment, employment and establishment growth. We find evidence of a significant relationship between IT investment intensity and productivity growth. We found no evidence of a similar link between IT and growth in the number of establishments operated by retail firms.


Information Technology Investment

Information Technology Investment

Author: Marc J. Schniederjans

Publisher: World Scientific

Published: 2010

Total Pages: 465

ISBN-13: 981428257X

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From the individual to the largest organization, everyone today has to make investments in IT. Making a smart investment that will best satisfy all the necessary decision-making criteria requires careful and inclusive analysis. This textbook provides an up-to-date, in-depth understanding of the methodologies available to aid in this complex process of multi-criteria decision-making. It guides readers on the process of technology acquisition ? what methods to use to make IT investment decisions, how to choose the technology and justify its selection, and how the decision will impact the organization.Unique to this textbook are both financial investment models and more complex decision-making models from the field of management science so that readers can extend the analysis benefits to enhance and confirm their IT investment choices. The wide range of methodologies featured in the book gives readers the opportunity to customize their best-fit solutions for their unique IT decision situation. This textbook is especially ideal for educators and students involved in programs dealing with technology management, operations management, applied finance, operations research, and industrial engineering.A complimentary copy of the ?Instructor's Manual and Test Bank? and the PowerPoint presentations of the text materials are available for all instructors who adopt this book as a course text. Please send your request to [email protected].


Book Synopsis Information Technology Investment by : Marc J. Schniederjans

Download or read book Information Technology Investment written by Marc J. Schniederjans and published by World Scientific. This book was released on 2010 with total page 465 pages. Available in PDF, EPUB and Kindle. Book excerpt: From the individual to the largest organization, everyone today has to make investments in IT. Making a smart investment that will best satisfy all the necessary decision-making criteria requires careful and inclusive analysis. This textbook provides an up-to-date, in-depth understanding of the methodologies available to aid in this complex process of multi-criteria decision-making. It guides readers on the process of technology acquisition ? what methods to use to make IT investment decisions, how to choose the technology and justify its selection, and how the decision will impact the organization.Unique to this textbook are both financial investment models and more complex decision-making models from the field of management science so that readers can extend the analysis benefits to enhance and confirm their IT investment choices. The wide range of methodologies featured in the book gives readers the opportunity to customize their best-fit solutions for their unique IT decision situation. This textbook is especially ideal for educators and students involved in programs dealing with technology management, operations management, applied finance, operations research, and industrial engineering.A complimentary copy of the ?Instructor's Manual and Test Bank? and the PowerPoint presentations of the text materials are available for all instructors who adopt this book as a course text. Please send your request to [email protected].


Explaining the Inconsistent Results of the Impact of Information Technology Investments on Firm Performance a Longitudinal Analysis

Explaining the Inconsistent Results of the Impact of Information Technology Investments on Firm Performance a Longitudinal Analysis

Author: Ashraf Khallaf

Publisher:

Published: 2019

Total Pages:

ISBN-13:

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Purpose - The purpose of this paper is to identify potential reasons for inconsistent results of the economic value of information technology (IT) investments. Furthermore, the study aims to develop framework and propositions to explore future opportunities and directions for research that examine the returns on IT investments.Design/methodology/approach - This study conducted a longitudinal analysis of the literature review concerning the impact of IT investments on firm performance to identify the reasons to the so-called “IT productivity paradox” and to explore future opportunities and directions for future research.Findings - The study provides and discusses the reasons for the inconsistent results in the prior research that examines IT investments payoff and suggested a framework and propositions for future research. Results of prior studies should be interpreted in the context of research questions raised, data used, level of analysis, IT investment measures, firm performance measures, time horizon and industry characteristics.Practical implications - IT managers and researchers should align IT investments with the environment in which a firm operates and competes and with firm's business strategies as important determinants of the return on IT investments.Originality/value - Understanding the link between firm performance and IT investments assists researchers and practitioners to understand why firms continue to pour enormous resources into IT and, more importantly, specifies the conditions under which firms are likely to achieve competitive advantages from their IT investments.


Book Synopsis Explaining the Inconsistent Results of the Impact of Information Technology Investments on Firm Performance a Longitudinal Analysis by : Ashraf Khallaf

Download or read book Explaining the Inconsistent Results of the Impact of Information Technology Investments on Firm Performance a Longitudinal Analysis written by Ashraf Khallaf and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Purpose - The purpose of this paper is to identify potential reasons for inconsistent results of the economic value of information technology (IT) investments. Furthermore, the study aims to develop framework and propositions to explore future opportunities and directions for research that examine the returns on IT investments.Design/methodology/approach - This study conducted a longitudinal analysis of the literature review concerning the impact of IT investments on firm performance to identify the reasons to the so-called “IT productivity paradox” and to explore future opportunities and directions for future research.Findings - The study provides and discusses the reasons for the inconsistent results in the prior research that examines IT investments payoff and suggested a framework and propositions for future research. Results of prior studies should be interpreted in the context of research questions raised, data used, level of analysis, IT investment measures, firm performance measures, time horizon and industry characteristics.Practical implications - IT managers and researchers should align IT investments with the environment in which a firm operates and competes and with firm's business strategies as important determinants of the return on IT investments.Originality/value - Understanding the link between firm performance and IT investments assists researchers and practitioners to understand why firms continue to pour enormous resources into IT and, more importantly, specifies the conditions under which firms are likely to achieve competitive advantages from their IT investments.


The Role of Information Technology in Firm Strategy

The Role of Information Technology in Firm Strategy

Author: Alessandro Iacopini

Publisher: LAP Lambert Academic Publishing

Published: 2010-09-01

Total Pages: 116

ISBN-13: 9783838384269

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The debate on the role of IT in the competitive dynamics of enterprises has assumed a remarkable importance, during the last few years, in the economic and managerial literature. Most of the literature pays attention to the relationship between IT investments and business performance. This approach underestimates the analysis of the typology of IT expenditure, specifically in terms of organization and business strategy effects. IT investments in business processes include several types of technologies and not all of them are able to influence the competitive advantage of firms. Consequently, it cannot be taken for granted that IT expenditure 'per se' is a correct proxy for evaluating the role of IT on firm performance, without a distinction of IT typology and destination. Therefore, in this work we study the role assigned by firms to IT resources by analysing the decision making process for IT investment choices. The aims of this work are mainly two: i) analysing how IT investments affect the competitive advantage of the enterprise; ii) understanding the role of IT in the definition and implementation of firm strategy.


Book Synopsis The Role of Information Technology in Firm Strategy by : Alessandro Iacopini

Download or read book The Role of Information Technology in Firm Strategy written by Alessandro Iacopini and published by LAP Lambert Academic Publishing. This book was released on 2010-09-01 with total page 116 pages. Available in PDF, EPUB and Kindle. Book excerpt: The debate on the role of IT in the competitive dynamics of enterprises has assumed a remarkable importance, during the last few years, in the economic and managerial literature. Most of the literature pays attention to the relationship between IT investments and business performance. This approach underestimates the analysis of the typology of IT expenditure, specifically in terms of organization and business strategy effects. IT investments in business processes include several types of technologies and not all of them are able to influence the competitive advantage of firms. Consequently, it cannot be taken for granted that IT expenditure 'per se' is a correct proxy for evaluating the role of IT on firm performance, without a distinction of IT typology and destination. Therefore, in this work we study the role assigned by firms to IT resources by analysing the decision making process for IT investment choices. The aims of this work are mainly two: i) analysing how IT investments affect the competitive advantage of the enterprise; ii) understanding the role of IT in the definition and implementation of firm strategy.


Investment in Information Technology and Organizational Performance

Investment in Information Technology and Organizational Performance

Author: Peter Weill

Publisher:

Published: 2015

Total Pages: 27

ISBN-13:

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Information technology (IT) is essential to many businesses, but there are few guidelines for determiningthe adequate level of investment in IT. The purpose of this paper is to further understanding of themechanism of IT investment. Previous studies on IT investment are briefly presented. The authorsperformed six-mini case studies of large companies in five different industries; these studies addressed thequestions of how firms define IT and how they manage their investment in IT. Our goal was to formulatea model of the relationship between IT investment and organizational performance. We present themodel 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 conceptof an industry-based threshold investment, the conversion effectiveness of IT investment, and the conceptof productive capacity. The most important finding relates to the separation of different types of ITinvestment and their logical matching to particular performance measures.


Book Synopsis Investment in Information Technology and Organizational Performance by : Peter Weill

Download or read book Investment in Information Technology and Organizational Performance written by Peter Weill and published by . This book was released on 2015 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt: Information technology (IT) is essential to many businesses, but there are few guidelines for determiningthe adequate level of investment in IT. The purpose of this paper is to further understanding of themechanism of IT investment. Previous studies on IT investment are briefly presented. The authorsperformed six-mini case studies of large companies in five different industries; these studies addressed thequestions of how firms define IT and how they manage their investment in IT. Our goal was to formulatea model of the relationship between IT investment and organizational performance. We present themodel 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 conceptof an industry-based threshold investment, the conversion effectiveness of IT investment, and the conceptof productive capacity. The most important finding relates to the separation of different types of ITinvestment and their logical matching to particular performance measures.


The Business Value of Computers

The Business Value of Computers

Author: Paul A. Strassmann

Publisher: Information Economics Press

Published: 1990

Total Pages: 558

ISBN-13: 9780962041327

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The book addresses the practical needs of executives responsible for planning, budgeting & justifying information technology expenditures. Written by the former chief information executive (1956-1978) & vice president of strategic planning (1978-1985), author of the widely acclaimed & translated INFORMATION PAYOFF - THE TRANSFORMATION OF WORK IN THE ELECTRONIC AGE (Free Press, 1985), lecturer & university professor. Reviews: "A New Bible for Management Information Systems. An eminently readable book made more so by a playful sense of humor" -Information Week-; "Strips away obfuscation that has concealed the real value of computers." (The Financial Post); "A true path to the Holy Grail of business value." (Computer Weekly); "Some surprising answers to familiar questions cast new light on investing profitably in computer hardware & software." (The Conference Board); "All those either transfixed or baffled by the powers & potential of computers would do well to heed Strassmann's advice." (Daily Telegraph); "Measuring managerial productivity is the key to knowing how to invest in information technology. Strassmann's new book sets out the results of his research in detail. His argument comes through clearly." (The Financial Times).


Book Synopsis The Business Value of Computers by : Paul A. Strassmann

Download or read book The Business Value of Computers written by Paul A. Strassmann and published by Information Economics Press. This book was released on 1990 with total page 558 pages. Available in PDF, EPUB and Kindle. Book excerpt: The book addresses the practical needs of executives responsible for planning, budgeting & justifying information technology expenditures. Written by the former chief information executive (1956-1978) & vice president of strategic planning (1978-1985), author of the widely acclaimed & translated INFORMATION PAYOFF - THE TRANSFORMATION OF WORK IN THE ELECTRONIC AGE (Free Press, 1985), lecturer & university professor. Reviews: "A New Bible for Management Information Systems. An eminently readable book made more so by a playful sense of humor" -Information Week-; "Strips away obfuscation that has concealed the real value of computers." (The Financial Post); "A true path to the Holy Grail of business value." (Computer Weekly); "Some surprising answers to familiar questions cast new light on investing profitably in computer hardware & software." (The Conference Board); "All those either transfixed or baffled by the powers & potential of computers would do well to heed Strassmann's advice." (Daily Telegraph); "Measuring managerial productivity is the key to knowing how to invest in information technology. Strassmann's new book sets out the results of his research in detail. His argument comes through clearly." (The Financial Times).


The Role of Information Technology in Risk/Return Relations of Firms

The Role of Information Technology in Risk/Return Relations of Firms

Author: Hüseyin Tanriverdi

Publisher:

Published: 2015

Total Pages: 28

ISBN-13:

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Information Technology (IT) investments are the largest capital budgeting item in most U.S. firms. Thus, there is significant scholarly interest in understanding the relationship between IT investments and firm performance. However, findings to date remain mixed: while some studies find a positive relationship between IT investments and firm performance, others fail to find any significant relationships at all. One possible reason for this may be that most studies conceptualize and measure firm performance in terms of returns - but ignore risk. Although risk is also an important aspect of firm performance, and there are tradeoffs between risks and returns, most IS studies have not included risk in examining the relationship between IT investments and firm performance. Focusing only on the return implications of IT ignores risk/return tradeoffs and the possibility that IT can influence the risk/return positions of firms. In this study, we build on and extend the economic theory of complementarities to explain how and why IT influences risk/return relations of firms. We discuss how the incorporation of risk into the analysis of performance effects of IT provides new insights for theory and practice.


Book Synopsis The Role of Information Technology in Risk/Return Relations of Firms by : Hüseyin Tanriverdi

Download or read book The Role of Information Technology in Risk/Return Relations of Firms written by Hüseyin Tanriverdi and published by . This book was released on 2015 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: Information Technology (IT) investments are the largest capital budgeting item in most U.S. firms. Thus, there is significant scholarly interest in understanding the relationship between IT investments and firm performance. However, findings to date remain mixed: while some studies find a positive relationship between IT investments and firm performance, others fail to find any significant relationships at all. One possible reason for this may be that most studies conceptualize and measure firm performance in terms of returns - but ignore risk. Although risk is also an important aspect of firm performance, and there are tradeoffs between risks and returns, most IS studies have not included risk in examining the relationship between IT investments and firm performance. Focusing only on the return implications of IT ignores risk/return tradeoffs and the possibility that IT can influence the risk/return positions of firms. In this study, we build on and extend the economic theory of complementarities to explain how and why IT influences risk/return relations of firms. We discuss how the incorporation of risk into the analysis of performance effects of IT provides new insights for theory and practice.