- Volume 16 Issue 2
Financial IT evaluation methods have been unable to satisfy firms' requirements. There has been a growing demand for more comprehensively and non-financially measuring the IT performance. We developed a process-based approach in evaluating impacts of IT on primary activities. In this research we proposed a model that uses the corporate objective of IT and strategic fitt as the core independent variables in measuring the IT effect. Based on the data collected from the management variables of the 125 companies located in Korea, the companies were classified into the 4 different groups according to their corporate objective for IT: un-oriented, operations oriented, market oriented and dual oriented. Through the empirical analysis, we were able to demonstrate that the management of the companies showing a higher orientation level perceives a better IT investment performance, and this shows that the corporate objective for IT serves as a useful index for measuring the IT investment effect. In this research, it was also demonstrated that the strategic alignment has a positive influence on perceiving the IT investment effect.
Supported by : Cheongju University
- E. Brynjolfsson & L. Hitt. (1996). Paradox lost? firm-level evidence on the returns to information systems spending. Management Science, 42(4), 541-558. https://doi.org/10.1287/mnsc.42.4.541
- S. Dewan & C. Min. (1997), The substitution of information technology for other factors of production: a firm-level analysis. Management Science, 43(12), 1660-1675. https://doi.org/10.1287/mnsc.43.12.1660
- R. S. Kaplan & D. P. Norton. (1997). The Balanced Scorecard that Drive Performance. Harvard Business Review, 75(2), 71-79.
- H. C. Lucas. (1999). Information Technology and the Productivity Paradox: Assessing the Value of Investing in IT. New York: Oxford University Press.
- S. L. Jarvenpaa & B. Ives. (1991). Executive involvement and participation in the management of IT. MIS Quarterly, 15(2), 205-227. https://doi.org/10.2307/249382
- Compass Group. (1999). International IT Survey Census. Rotterdam: Compass Publishing.
- G. Premkumar & W. R. King. (1999). An empirical assessment of information systems planning and the role of information systems in organizations. Journal of Management Information Systems, 9(2), 99-125.
- N. Venkatraman & V. Ramanujam. (1987). Measurement of business economic performance: an examination of method convergence. Journal of Management, 13(1), pp.109-122. https://doi.org/10.1177/014920638701300109
- P. Tallon, V. Gurbaxani & K. L. Kraemer. (1998). Fact or Fiction: the reality behind executive perceptions of IT business value. Working paper, University of California, Irvine.
- W. H. Delone & E. R. McLean. (1992). Information systems success: the quest for the dependent variable. Information Systems Research, 3(2), 60-95. https://doi.org/10.1287/isre.3.1.60
- A. Bauru, C. H. Kriebel & T. Mukhopadhyay. (1995). Information Technologies and business value: an analytic and empirical investigation. Information Systems Research, 6(1) , 3-23. https://doi.org/10.1287/isre.6.1.3
- V. Gurbaxani & S. Whang. (1991). The impacts of information technology on organizations and markets. Communications of the ACM, 34(1), 59-73.
- M. E. Porter. (1996). What is strategy?. Harvard Business Review, 74(6), 61-77.
- V. Sethi & W. R. King. (1993). Development of measures to assess the extent to which an information technology application provides competitive advantage. Management Science, 40(12), 1601-1627. https://doi.org/10.1287/mnsc.40.12.1601
- J. C. Henderson & N. Venkatraman, (1993). Strategic alignment: leveraging information technology for transforming organizations. IBM Systems Journal, 32(1), 4-16.
- Gapsoo Lee, Jonghwan Lee, Cheoseok Kim & Do-Young Wie. (2014). A Study on the Effect of Aligning with Management Strategy and Strategic Performance Management on Firm's Performance in Medium and Small Firms. Journal of Digital Convergence, 12(5), 101-113. https://doi.org/10.14400/JDC.2014.12.5.101
- T. G. Kang. (2003). The Relationship between IT Strategy, IT Invesetment, and IT Performance. Journal of Digital Convergence, 1(1), 165-187.
- G. I. Han. (2006). The Effects of Interaction between the IT Activity and the Organizational Strategy on the System Performance. Journal of Digital Convergence, 4(2), 75-85.