Technology Investment and Business Performance
Rai, Arun
arunrai@gsu.edu
Patnayakuni, Ravi r.patnayakuni@uah.edu
Patnayakuni, Nainika naina.seth@uah.edu
Communications of the ACM; Jul97, Vol. 40
Issue 7, p89-97
Abstract
The article focuses on relationship between
measures of information technology (IT) investment and facets of corporate
business performance. The results of the authors's
study suggest that IT investments have begun to show results in proving they
can make a positive contribution to firm output and labor productivity.
However, there is a need to improve the modeling and measurement of the
performance effects of aggregate IT investments. The Authors' study suggests
that measures of IT investment have differential effects on the various
measures of corporate business performance. A research strategy for modeling IT
effects on firm output performance and labor productivity needs to be different
from a research strategy for modeling IT effects on management effectiveness
and strategic business performance. Another significant issue is how IT's effects should be measured.
Organizations measure value of IT investments to a very limited extent in terms
of minimal benchmarks of time and cost schedules.