Thirst for Business Value of Information Technology

Authors:
Govindan Marthandan;Tang Chun Meng
Affiliations:
Multimedia University, Malaysia;Multimedia University, Malaysia
Venue:
International Journal of Technology Diffusion
Year:
2010

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Abstract

For years information technology IT has helped companies improve organizational efficiency and effectiveness. Today's IT plays a more strategic role in building capabilities for sustaining and creating competitive advantages. The increasing importance of IT has led many organizations to integrate it into their daily operations. To justify the ever-increasing spending on IT, organizations have been searching for evaluation methods to prove the business value of IT. However, this is a challenging undertaking, as there are contradictory answers to questions on whether it is worthwhile to pay substantial sums for IT. To gain insight into the reasons behind the contradictory answers, this paper first reviews conflicting research results of past studies on IT business value. It then explains the term IT productivity paradox. Last, it provides five reasons why IT business value is not fully reflected in the way business managers expect it to be.