Technology investment and business performance

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.

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