Exploratory analysis on the halo effect of strategic goals on IOS effectiveness evaluation

Authors:
Makoto Nakayama;Norma G. Sutcliffe
Affiliations:
School of Computer Science, Telecommunications and Information Systems (CTI), DePaul University, 243 South Wabash Avenue, Chicago, IL;School of Computer Science, Telecommunications and Information Systems (CTI), DePaul University, 243 South Wabash Avenue, Chicago, IL
Venue:
Information and Management
Year:
2005

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Abstract

How do managers evaluate the effectiveness of IT use? Past literature showed that the assessment of IT effectiveness is not straightforward, especially when viewed in terms of "business outcomes," such as sales increase, firm profitability, and firm success. For inter-organizational systems (IOS), IT effectiveness evaluation is even more challenging, because these IOS are an integral part of a retail channel distribution system where several factors can influence business outcomes. Under such circumstances, IOS effectiveness evaluation is prone to a halo effect. A survey of retailers and suppliers showed that firms favorably judge IOS as long as their strategic goals are met, even when they do not recognize any IOS contribution towards accomplishing them. Conversely, IOS use was not appreciated when strategic goals were not met--even if IOS use benefits the firm at the operational or tactical level. In effect, IOS evaluation was overshadowed by the halo effects of strategic goal accomplishment.