scholarly journals Governing information technology (IT) investment: A contingency perspective on organization’s IT investment goals

2021 ◽  
pp. 031289622110095
Author(s):  
Syaiful Ali ◽  
Peter Green ◽  
Alastair Robb ◽  
Adi Masli
Keyword(s):  
Information Technology ◽  
Boards Of Directors ◽  
Contingency Theory ◽  
Jel Classification ◽  
It Investment ◽  
It Investments ◽  
Contingency Perspective ◽  
Uniform Approach ◽  
Business Executives

Using contingency theory, we argue that there is not a uniform approach for companies to govern information technology (IT) investments. Rather, the level of governance over IT investments is contingent upon the organization’s goals for its IT investments. We find that Australian organizations with both operation- and market-focused IT investment goals (i.e. dual-focused IT goals) demonstrate higher IT investment governance (ITIG) levels than those with less focused IT goals. We also document that dual-IT-focused firms that do not implement high levels of ITIG underperform. Our study informs business executives, boards of directors, and other practitioners interested in governance implementations over IT investments. JEL Classification: M1

Assessing the Value of Information Technology Investment to Firm Performance

2002 ◽  
pp. 257-278
Author(s):  
Qing Hu ◽  
Robert T. Plant
Keyword(s):  
Information Technology ◽  
Firm Performance ◽  
Financial Performance ◽  
Capital Investment ◽  
Large Scale ◽  
Performance Data ◽  
It Investment ◽  
Firm Level ◽  
It Investments ◽  
And Performance

The promise of increased competitive advantage has been the driving force behind the large-scale investment in information technology (IT) over the last three decades. There is a continuing debate among executives and academics as to the measurable benefits of this investment. The return on investment (ROI) and other performance measures reported in the academic literature indicate conflicting empirical findings. Many previous studies have based their conclusions on the statistical correlation between IT capital investment and firm performance data of the same time period. In this study we argue that the causal relationship between IT investment and firm performance could not be reliably established through concurrent IT and performance data. We further submit that it would be more convincing to infer causality if the IT investments in the preceding years are significantly correlated with the performance of a firm in the subsequent year. Using the Granger causality models and three samples of firm-level financial data, we found no statistical evidence that IT investments have caused the improvement of financial performance of the firms in the samples. On the contrary, the causal models suggest that improved financial performance over consecutive years may have contributed to the increase of IT investment in the subsequent year. Implications of these findings as well as directions for future studies are discussed.

Financial Appraisal and the IS/IT Investment Decision Making Process

1998 ◽  
Vol 13 (1) ◽  
pp. 3-14 ◽  
Author(s):  
Joan Ballantine ◽  
Stephanie Stray
Keyword(s):  
Decision Making ◽  
Information Technology ◽  
Capital Investment ◽  
Investment Decision ◽  
Decision Making Process ◽  
It Investment ◽  
It Investments ◽  
Investment Appraisal ◽  
Investment Decision Making ◽  
Financial Appraisal

This paper explores the techniques used by organizations to appraise Information Systems (IS)/Information Technology (IT) investments, and concentrates, in particular, on techniques of capital investment appraisal. We draw on relevant studies reported in both the accounting and finance, and the IS literature, which have addressed their usage. Where possible comparisons are drawn between both sets of literatures. The results of a survey that specifically examined IS/IT investment appraisal practices of a sample of UK companies is also presented. Among the issues discussed include the extent to which capital investment appraisal techniques are used to appraisal investments, the importance of the techniques used and the problems attendant on the decision making process.

Social Learning in Information Technology Investment: The Role of Board Interlocks

2020 ◽  
Author(s):  
Zhuo (June) Cheng ◽  
Arun Rai ◽  
Feng Tian ◽  
Sean Xin Xu
Keyword(s):  
Information Technology ◽  
Social Learning ◽  
Positive Relationship ◽  
Large Data ◽  
Corporate Boards ◽  
It Investment ◽  
Data Set ◽  
It Investments ◽  
Board Interlocks ◽  
Focal Firm

We use a social learning perspective to extend our understanding of information technology (IT) investment and return. Specifically, we investigate social learning in the context of interlocks between corporate boards, which allow firms to share knowledge and experiences with respect to their IT investments. Using a large data set of firm-years from 2001–2008, we find (a) a positive relationship exists between a focal firm’s IT investment and that of its interlocked firms; (b) this positive relationship is amplified by the interlocked firms’ IT capability but only if the focal firm has an active board, which devotes time to allow sufficient communication among directors; and (c) the component of the focal firm’s IT investment that is attributable to board interlock influence is positively related to the firm’s performance but only if the firm has an active board. Collectively, these findings support our central thesis: social learning through board interlocks can play a significant role in influencing a firm’s IT investments and enhancing their payoff. That said, attaining such benefits requires boards to incorporate those firms with high IT management capability and to strengthen board activity so interlocked members can substantively share their knowledge and experiences with IT investments. This paper was accepted by Anandhi Bharadwaj, information systems.

scholarly journals IT, CSR And Industry Relationships: A Descriptive Study

2011 ◽  
Vol 15 (3) ◽  
pp. 107
Author(s):  
Margaret L. Andersen ◽  
Yongtao (David) Hong ◽  
Limin Zhang
Keyword(s):  
Information Technology ◽  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Competitive Advantage ◽  
Descriptive Study ◽  
Exploratory Analysis ◽  
It Investment ◽  
Socially Responsible ◽  
It Investments ◽  
Corporate Social

From the resource-based perspective, corporate social responsibility (CSR) and investment in information technology (IT) are both associated with a firms profitable performance. Corporations, taking socially responsible actions, can create valuable intangible assets such as improved relations with stakeholders. In a similar fashion, effective investment in and use of information technology can positively impact a firms competitive advantage. Both CSR and IT investments consume organizational resources and each may lead to a competitive advantage separately. This paper explores if one complements or opposes the other.Investment in information technology and the socially responsible activities of companies vary across industries. The purpose of this paper is to offer an exploratory analysis into a possible association between IT investment and CSR at the industry level. The findings indicate that there is no discernible relationship.

scholarly journals The Impact Of Information Technology Investments On Managerial Decision Making: Evidence From Dividend Payout

2011 ◽  
Vol 18 (3) ◽  
Author(s):  
T. Selwyn Ellis ◽  
K. Michael Casey ◽  
Hani I. Mesak
Keyword(s):  
Information Technology ◽  
Agency Cost ◽  
Font Size ◽  
It Investment ◽  
Managerial Decision ◽  
Dividend Payout ◽  
It Investments ◽  
Managerial Decisions ◽  
Information Technology Investments ◽  
The Impact

<p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt;"><span style="mso-bidi-font-size: 10.0pt;"><span style="font-size: x-small;"><span style="font-family: Times New Roman;">Investments in Information Technology (IT) are an increasing part of organizational expenditures in spite of the fact that there is little evidence in the existing literature that suggests these investments are related to the organization&rsquo;s performance. The uncertainty of IT investment payoff should be reflected in other managerial decisions. This research examines Rozeff's (1982) agency cost/transaction cost tradeoff model to determine if IT investments are related to dividend payout ratios for an organization. A dividend payout model including an IT investment variable is estimated. The estimation results suggest that a significant positive relationship exists between dividend payout and a firm&rsquo;s IT investments.</span></span></span></p>

Strategy Implementation

2006 ◽  
pp. 126-139
Author(s):  
Petter Gottschalk
Keyword(s):  
Information Technology ◽  
Organizational Performance ◽  
Critical Role ◽  
Strategy Implementation ◽  
It Investments ◽  
Business Executives ◽  
New Information ◽  
It Planning ◽  
It Executives ◽  
The Impact

Stages 6 and 7 cover strategy implementation in the Y model. While stage 6 is concerned with implementing the plan and describing results, stage 7 is concerned with evaluating results as illustrated in Figure 6.1. The creation of IS/IT strategy has become a major challenge to business executives and IS/IT executives in recent years. Investments in information technology have been large, and many failed investments reflect this challenge. The impact of IT on organizational performance has grown in strategic importance, and thus the significance of failed IT investments is even greater. Information processing and information technology are becoming critical to many business and government operations, and the technology itself is changing at a rapid rate. New information technology will continue to transform organizations, and changes in how industry participants use IT can alter established relationships in an industry. Strategic IS/IT planning can play a critical role in helping organizations to increase efficiency, effectiveness and competitiveness. Although organizations use different methods in their analysis of current and desired situation, the resulting plans are to be implemented.

Small Indonesian Holding Company Of SME’s : Study on The Value on IT Investment : PT.XYZ Core

2019 ◽  
Vol 3 (1) ◽  
pp. 155-159
Author(s):  
Dodik Novianto
Keyword(s):  
Information Technology ◽  
Best Practices ◽  
Business Value ◽  
It Investment ◽  
It Investments ◽  
Technology Investment ◽  
Holding Company ◽  
It Managers ◽  
Information Technology Investment ◽  
The Cost

This paper explains that in PT.XYZ as SMEs do not have the IT integrated . IT managers perform checks on the company and find the condition that it is true in the enterprise IT integrated yet. In this paper further research requires a comparison with conducting surveys and studies in several large holding company. This is what causes the difficulty to estimate the cost and benefits of information technology investment Compared to investment value. (Money et al., 1995) share the benefits the use of information technology into two kinds, tangible and intangible . This has the caused many organization have difficulty how to calculate the cost and benefit of the investment associated with the resulting benefits and using Val IT one of the solution to study on the value on IT investments in SMEs at PT.XYZ . Val IT is now, the realization of business value of a clear investment, measured monitoring, to provide a means to optimize, and add the best practices for the end.

Information technology investment and innovation performance: does investment paradox exist?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Peinan Ji ◽  
Xiangbin Yan ◽  
Yan Shi
Keyword(s):  
Information Technology ◽  
Time Lag ◽  
Innovation Performance ◽  
Test Model ◽  
It Investment ◽  
Firm Innovation ◽  
Data Set ◽  
Content Type ◽  
Lag Effect ◽  
Enterprise Innovation

Purpose The purpose of this study is to deepen the understanding of the effects of information technology (IT) investment on firm innovation performance and examining the investment paradox effect in China. Design/methodology/approach Using a sample of China’ public firms IT investment data between 2010 and 2016, the authors establish a test model of IT investment and innovation performance. Findings The result indicates that IT investment in firms have no effect on innovation performance in the investment period. However, in the full sample and manufacturing sample, the IT investment has a significant positive effect on innovation performance in the post-investment years. In addition, this study finds that large companies and low-age companies may contribute more to innovation when firm investment in IT. Research limitations/implications There are several limitations in this research. First, the authors are failed to obtain a larger sample about the IT investment information data set in China, so this study was compelled to use limited sample data from China, hence, this could lead to errors of too early generalization. Second, the authors use the number of invention patent applications to represent the performance of enterprise innovation, which may not show enterprise innovation effectively. Third, the firms in the sample are all in China Listed Companies, so this may not accurately reflect the entire environment of firm innovation performance, and could possibly. Practical implications The research confirms that there is a paradox and time lag effect in IT investment, which enterprises should pay attention to. Originality/value Existing research confirms that corporate IT investments can bring new products or services. However, the authors still do not know whether IT investment has improved the company’s ability of innovation. This study will fill this gap and the industry effect and time lag effect of the influence of IT investment on innovative performance are also examined.

An Examination of the Effect of IT Investments on Firm Value: The Case of Y2K-Compliance Costs

2000 ◽  
Vol 14 (2) ◽  
pp. 95-108 ◽  
Author(s):  
Gopal V. Krishnan ◽  
Ram S. Sriram
Keyword(s):  
Information Technology ◽  
Stock Market ◽  
Firm Value ◽  
Market Value ◽  
Annual Reports ◽  
Equity Valuation ◽  
Compliance Costs ◽  
Book Value ◽  
It Investments ◽  
Share Prices

In this study, using the recent Y2-compliance expenditures as an example, we examine whether disclosures relating to investments in information technology (IT) were relevant to investors in assessing the market value of equity. We use a sample of 190 firms that disclosed estimates of total Y2K-compliance costs in their 1997 annual reports to examine the association between Y2K-compliance costs and share prices. We test the joint hypothesis that Y2K-compliance costs were relevant to equity valuation of firms that chose to become Y2K-compliant and that these costs were sufficiently reliable to be reflected in share prices. We find that estimates of Y2K-compliance costs were positively and significantly related to share prices after controlling for earnings, book value of equity, and other factors. We find that the stock market is not shortsighted, and consider investments in Y2K-remediation efforts a significant and value-increasing activity for the average firm.

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