Information Technology Investment

Abstract

Much evidence regarding the relationship between IT investment and firm performance is contradictory. Numerous issues have been summarized and discussed as factors that contribute to the contradictory findings. While many researchers have found IT investments to have a positive performance impact, others have failed to support those findings. These contradictory findings concerning IT investment appear at the firm, industry, and national economy levels of analysis. There are four broad issues related to the role of IT within an organization that are factors contributing to the contradictory findings: structural business characteristics, management ability, definition of IT, and measurement approach. While there are many studies that use broad secondary indices and economic models to look for mathematical relationships between IT investment and firm performance, few studies take an in-depth look at the role of IT within an organization and expose the dynamics of this relationship.