Mediating role of managing information technology and its impact on firm performance

Abstract

Purpose Managing IT with firm performance (FM) has always been a debatable topic in literature and practice. Prior studies examining the above relationship have reported mixed results and have yet ignored the eminent managing IT practices. The purpose of this paper is to empirically investigate the relevance of Val-IT 2.0 practice in managing IT investment, and its mediating role in the FM context. Design/methodology/approach This paper is developed on two themes of literature. First, managing IT as a firm’s IT capability in order to generate value from IT investment. Second, IT as a firm’s resource under resource-based view offers firm’s competence that deploys potentials in achieving FM. The structural equation modeling with partial least squares techniques used for analyzing data collected from 176 organization’s IT, and business executives in China. Findings The results of this study show empirical evidence that Val-IT’s components (value governance, portfolio management, and investment management) are significantly linked to the management of IT (MIT), and it found to be a significant mediator between Val-IT components and FM. Research limitations/implications This research contributes to the literature and practice by way of highlighting the value generation through managing IT on FM. Originality/value This study is fully based on Val-IT 2.0 with the FM where the managing IT mediate this relationship in a country-specific study in China. This study adds to the Chinese information system literature which suffers the lack of empirical studies in the context of MIT research.

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