The paper “Maximizing the positive influence of IT for improving organizational performance” published in the “Journal of Strategic Information Systems” of Elsevier proves that a 13% increase in organizational performance can be achieved by managing properly ICT in organizations.
The academic body that studies information technology (IT) has spent years debating whether investment in IT corresponds to an adequate improvement in organizational performance. Since Solow stated in 1987 the productivity paradox, the debate has been open. In general, it has focused on two issues.
On one hand, there are explanations regarding contextual variables that may act as moderators of the relationship between investment in IT and organizational performance. These include firm size, the complexity of the firm or the complexity of the sector in which the firms operates.
On the other hand, some studies refer to methodological issues, such as the manner in which investment in IT, productivity, and even organizational performance are measured. This type of reasoning fits perfectly in today’s world, which faces a change of paradigm with few antecedents in the history of mankind
However, in our opinion, the literature seems to have paid little attention to the ways in which investment in IT can lead to improved organizational performance; this is, the path that allows IT investments to improve organizational performance (figure 1)
In this article, we propose a model (figure 2) that has 7 hypothesis and we have validated this model using, on one hand, data from the ICT area of universities and, on the other, performance indicators of universities based on publicly available rankings. In our work, we have chosen the raking by the Complutense University of Madrid since it is one of the few that simultaneously reflects research and teaching.
By validating this model, we have shown a path that relates IT investments and organizational performance. It starts with planning and management in the context of technology. It is the variable that organizes and directs all IT activity and directly influences the two types of resources most studied in the literature on IT performance. Hence, IT human resources and basic IT assets constitute the basis for developing the three types of IT functions usually found in organizations: the development and acquisition of applications, guaranteeing the reliability and security of IT systems and communications, and user support. All three are important for ensuring the impact of technology in the organization in one of the following aspects:
- the incorporation of IT in products and services that lead to better organizational performance
- the effective redesign of business processes by means of IT, which also leads to improvements in organizational performance
- the improvement, via IT, of the managers’ capability to make decisions on aspects relevant to performance;
- and the contribution of IT to the creation of flexible organizational structures that are beneficial to the organization, customers, and suppliers.
This IT impact will cause an increase in organizational performance, with our model explaining 13% of its variance, which, in our opinion, is a significant figure considering that the model uses only IT-related variables. In this respect, it is logical to think that organizational performance is also explained by other factors (e.g., financial, sales and marketing management, etc.) that have nothing to do with IT
As a conclusion, the importance of planning and management in the context of technology has been shown. It is the variable that organizes and directs all IT activity and directly influences the two types of resources most studied in the literature on IT performance.
These are the main findings of the paper entitled “Maximizing the positive influence of IT for improving organizational performance” by the researchers of the University of Las Palmas de Gran Canaria Jacques Bulchand-Gidumal and Santiago Melián-González published in December 2011 in the international “Journal of Strategic Information Systems” (impact index: 2.9) by Elsevier. Up to May, 17th 2012 it is freely available for download.
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