AN EMPIRICAL INVESTIGATION OF IS STRATEGY AND IS CONTRIBUTION TO FIRM PERFORMANCE

Abstract

Given the important impact that an IS strategy has on the potential value IS brings to an organization, we develop and test a model of IS Strategy and Performance. Our survey-based study provides strong evidence that firms with defined IS strategies perform better than those without defined IS strategies. Our study also provides evidence that the two IS defined strategies -- IS Innovator and IS Conservative -- contribute in very different ways to firm performance: the IS Innovator strategy contributes to strategic growth whereas the IS Conservative strategy contributes to firm efficiency. Organizations without a clearly defined IS strategy experienced a negative contribution of IS to firm performance. The different types of performance had differing affects on satisfaction with the IS department and satisfaction with the CIO such that CIOs overseeing an Innovator strategy experience lower satisfaction from their organizations than do CIOs overseeing a Conservative strategy. The lowest performance and satisfaction levels were seen in firms with no IS strategy. Firms with no IS strategy should realize the negative outcomes of such a lack of strategy and work to extricate themselves before a consistent pattern of investing in IS without clear organizational benefit develops.

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