Information Technology and Organisational Performance: Reviewing the Business Value of IT Literature

Chapter
Part of the Integrated Series in Information Systems book series (ISIS, volume 28)

Abstract

Managing Information Technology (IT) investments continues to be a challenge for firms due to the difficulty associated with demonstrating IT ­contributions to organisational performance. Many IT contributions are not accounted for because they cannot be easily quantified. Linking IT to organisational performance is a complex problem that is informed by insights from ­multiple theoretical paradigms. The aim of this chapter is to comprehensively review work done by both academic and practitioners, and to explore why new approaches to managing IT investments are needed. To achieve this aim, we will start by defining IT assets and business value and exploring the different dimensions used to measure the business value of IT. Then, we will look at the early research on IT business value and the emergence of the Productivity Paradox. After that, we will delve into the three current theoretical paradigms: economics, management and sociology. The theoretical lenses and models used in these paradigms will also be discussed. Finally, future research directions are suggested.

Keywords

Business value Information technology IT business value Performance 

Abbreviations

BVI

Business value index

CobiT

Control objectives for information and related technology

EDI

Electronic data interchange

IRR

Internal rate of return

ISACA

Information systems audit and control association

IT

Information technology

ITGI

IT Governance Institute

NPV

Net present value

OPMs

Option pricing models

ROI

Return on investment

TEI

Total economic impact

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© Springer Science+Business Media, LLC 2012

Authors and Affiliations

  1. 1.Department of Strategy & Operations Management, Bristol Business SchoolUniversity of the West of EnglandBristolUK

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