A framework for the impact of IT on organizational performance

Purpose – Despite the constant stream of research investigating information technology (IT) business value, IT capabilities, and competitive advantage, researchers are calling for a more coherent understanding of the firm‐level impacts of IT, and how those firm‐level impacts can be measured. The purpose of this study is to investigate the multitude of organization‐level studies of the impact of IT.Design/methodology/approach – Meta‐analysis of IS literature from 2001‐2009.Findings – The findings are synthesized into an overarching framework of the impact of IT at the organization level. The framework categorizes measures of the impact of IT into productivity, profitability, and intangible benefits, while the antecedents of IT impact are categorized into IT resources, IT capabilities, IT/business alignment and external factors.Originality/value – The research framework proposed provides a comprehensive snapshot of IS studies on organizational performance.

[1]  Eric W. Ford,et al.  IT outsourcing and firm-level performance: A transaction cost perspective , 2009, Inf. Manag..

[2]  Elliot Bendoly,et al.  The Performance Effects of Complementarities Between Information Systems, Marketing, Manufacturing, and Supply Chain Processes , 2007, Inf. Syst. Res..

[3]  Nirup M. Menon,et al.  Differential Effects of the Two Types of Information Systems: A Hospital-Based Study , 2009, J. Manag. Inf. Syst..

[4]  Varun Grover,et al.  Research Report: A Reexamination of IT Investment and the Market Value of the Firm - An Event Study Methodology , 2001, Inf. Syst. Res..

[5]  Vallabh Sambamurthy,et al.  The Shareholder-Wealth and Trading-Volume Effects of Information-Technology Infrastructure Investments , 2002, J. Manag. Inf. Syst..

[6]  Howard Smith,et al.  IT Doesn't Matter-Business Processes Do: A Critical Analysis of Nicholas Carr's I.T. Article in the Harvard Business Review , 2003 .

[7]  Carlos J. Navarrete,et al.  Information Technology Expenditure and Industry Performance: The Case of the Mexican Banking Industry , 2002 .

[8]  G. Grisetti,et al.  Further Reading , 1984, IEEE Spectrum.

[9]  William R. King,et al.  A meta-analysis of the technology acceptance model , 2006, Inf. Manag..

[10]  Stephan Kudyba,et al.  Research Report: Increasing Returns to Information Technology , 2002, Inf. Syst. Res..

[11]  N. Carr.  IT doesn't matter , 2003, IEEE Engineering Management Review.

[12]  Kevin Zhu,et al.  Research Note - Information Technology in Supply Chains: The Value of IT-Enabled Resources Under Competition , 2009, Inf. Syst. Res..

[13]  Terry Anthony Byrd,et al.  Examining possible antecedents of IT impact on the supply chain and its effect on firm performance , 2003, Inf. Manag..

[14]  C. Sophie Lee,et al.  Modeling the business value of information technology , 2001, Inf. Manag..

[15]  Hüseyin Tanriverdi,et al.  Information Technology Relatedness, Knowledge Management Capability, and Performance of Multibusiness Firms , 2005, MIS Q..

[16]  Jerry N. Luftman,et al.  An Update on Business-IT Alignment: "A Line" Has Been Drawn , 2007, MIS Q. Executive.

[17]  E. Brynjolfsson,et al.  Beyond Computation: Information Technology, Organizational Transformation and Business Performance , 2000 .

[18]  Kweku-Muata Osei-Bryson,et al.  Exploring the relationship between information technology investments and firm performance using regression splines analysis , 2004, Inf. Manag..

[19]  Chee W. Chow,et al.  Strategy, IT applications for planning and control, and firm performance: The impact of impediments to IT implementation , 2006, Inf. Manag..

[20]  Terry Anthony Byrd,et al.  An exploratory examination of the relationship between flexible IT infrastructure and competitive advantage , 2001, Inf. Manag..

[21]  Erik Brynjolfsson,et al.  The productivity paradox of information technology , 1993, CACM.

[22]  Robert J. Kauffman,et al.  Systems Design, Process Performance, and Economic Outcomes in International Banking , 2006, J. Manag. Inf. Syst..

[23]  Ephraim R. McLean,et al.  Information Systems Success: The Quest for the Dependent Variable , 1992, Inf. Syst. Res..

[24]  Kenneth L. Kraemer,et al.  Fact or Fiction? A Sensemaking Perspective on the Reality Behind Executives' Perceptions of IT Business Value , 2007, J. Manag. Inf. Syst..

[25]  J. Barney.  Firm Resources and Sustained Competitive Advantage , 1991 .

[26]  Prashant C. Palvia.  Global Information Technology Research: Past, Present And Future1 , 1998 .

[27]  Randy V. Bradley,et al.  Information Systems Success in the Context of Different Corporate Cultural Types: An Empirical Investigation , 2006, J. Manag. Inf. Syst..

[28]  Jungsoo Park,et al.  Impact of International Information Technology Transfer on National Productivity , 2007, Inf. Syst. Res..

[29]  Robert J. Kauffman,et al.  Option-Based Risk Management: A Field Study of Sequential Information Technology Investment Decisions , 2007, J. Manag. Inf. Syst..

[30]  Raktim Pal,et al.  ERP and SCM systems integration: The case of a valve manufacturer in China , 2008, Inf. Manag..

[31]  Dazhong Wu,et al.  Competitive Environment and the Relationship Between IT and Vertical Integration , 2009, Inf. Syst. Res..

[32]  Gary L. Lilien,et al.  Location, Location, Location: How Network Embeddedness Affects Project Success in Open Source Systems , 2006, Manag. Sci..

[33]  Wesley Shu,et al.  Does information technology provide banks with profit? , 2005, Inf. Manag..

[34]  Gerold Riempp,et al.  A Methodological Examination of Empirical Research on Information Systems Success: 2003 to 2007 , 2008, AMCIS.

[35]  Fei Ren,et al.  Risk and Return of Information Technology Initiatives: Evidence from Electronic Commerce Announcements , 2007, Inf. Syst. Res..

[36]  Ephraim R. McLean,et al.  Key Issues for IT Executives , 2004, MIS Q. Executive.

[37]  Noor Azizi Ismail,et al.  The Alignment of Accounting and Information Systems in SMEs in Malaysia , 2006 .

[38]  Michael R. Wade,et al.  The Impact of Capabilities and Prior Investments on Online Channel Commitment and Performance , 2007, J. Manag. Inf. Syst..

[39]  Barrie R. Nault,et al.  Industry Level Supplier-Driven it Spillovers , 2006, Manag. Sci..

[40]  Varun Grover,et al.  Types of Information Technology Capabilities and Their Role in Competitive Advantage: An Empirical Study , 2005, J. Manag. Inf. Syst..

[41]  Clemens Bechter,et al.  Information Technology, Productivity and Profitability in Asia-Pacific Banks , 2005 .

[42]  Dazhong Wu,et al.  Manufacturers' Distribution Strategy in the Presence of the Electronic Channel , 2008, J. Manag. Inf. Syst..

[43]  Prabhudev Konana,et al.  Antecedents and Consequences of Internet Use in Procurement: An Empirical Investigation of U.S. Manufacturing Firms , 2007, Inf. Syst. Res..

[44]  Rajiv Sabherwal,et al.  Strategic Alignment Between Business and Information Technology: A Knowledge-Based View of Behaviors, Outcome, and Consequences , 2006, J. Manag. Inf. Syst..

[45]  Gary Klein,et al.  Relation of CIO background, IT infrastructure, and economic performance , 2009, Inf. Manag..

[46]  Markham T. Frohlich,et al.  e-Integration in the Supply Chain: Barriers and Performance , 2002, Decis. Sci..

[47]  Suzanne Rivard,et al.  A Keyword Classification Scheme for IS Research Literature: An Update , 1993 .

[48]  Irene Bertschek,et al.  Productivity Effects of Organizational Change: Microeconometric Evidence , 2001, Manag. Sci..

[49]  Raduan Che Rose,et al.  The relationship between information technology acceptance and organizational agility in Malaysia , 2005, Inf. Manag..

[50]  Bradley C. Wheeler,et al.  NEBIC: A Dynamic Capabilities Theory for Assessing Net-Enablement , 2002, Inf. Syst. Res..

[51]  D BankerRajiv,et al.  Plant information systems, manufacturing capabilities, and plant performance , 2006 .

[52]  James Wallace,et al.  The use and impact of human resource information systems on human resource management professionals , 2007, Inf. Manag..

[53]  F. Wolf.  Meta-Analysis: Quantitative Methods for Research Synthesis , 1987 .

[54]  Nilesh Saraf,et al.  IS Application Capabilities and Relational Value in Interfirm Partnerships , 2007, Inf. Syst. Res..

[55]  Gerold Riempp,et al.  The State of Research on Information Systems Success , 2009, Bus. Inf. Syst. Eng..

[56]  Eric W. T. Ngai,et al.  ERP systems adoption: An exploratory study of the organizational factors and impacts of ERP success , 2007, Inf. Manag..

[57]  Wonseok Oh,et al.  On the Assessment of the Strategic Value of Information Technologies: Conceptual and Analytical Approaches , 2007, MIS Q..

[58]  N. Mzoughi,et al.  Impact of Supply Chain Management and ERP on Organizational Performance and Competitive Advantage: Case of Tunisian Companies , 2008 .

[59]  Blake Ives,et al.  Review: IT-Dependent Strategic Initiatives and Sustained Competitive Advantage: A Review and Synthesis of the Literature , 2005, MIS Q..

[60]  Emilio Paolucci,et al.  Assessing the strategic value of Information Technology: An analysis on the insurance sector , 2007, Inf. Manag..

[61]  M. Porter,et al.  How Information Gives You Competitive Advantage , 1985 .

[62]  Eric T. G. Wang,et al.  A Virtual Integration Theory of Improved Supply-Chain Performance , 2006, J. Manag. Inf. Syst..

[63]  G. Glass.  Primary, Secondary, and Meta-Analysis of Research1 , 1976 .

[64]  E. Brynjolfsson,et al.  Paradox Lost? Firm-Level Evidence on the Returns to Information Systems Spending , 1996 .

[65]  D. J. Wu,et al.  Investment in Enterprise Resource Planning: Business Impact and Productivity Measures , 2002, J. Manag. Inf. Syst..

[66]  Paul P. Tallon.  A Process-Oriented Perspective on the Alignment of Information Technology and Business Strategy , 2007, J. Manag. Inf. Syst..

[67]  R. Rosenthal,et al.  Meta-analysis: recent developments in quantitative methods for literature reviews. , 2001, Annual review of psychology.

[68]  Christina Soh,et al.  Electronic Marketplaces and Price Transparency: Strategy, Information Technology, and Success , 2006, MIS Q..

[69]  Kyung Kyu Kim,et al.  An Assessment of Electronic Information Transfer in B2B Supply-Channel Relationships , 2005, J. Manag. Inf. Syst..

[70]  Anandhi S. Bharadwaj,et al.  A Resource-Based Perspective on Information Technology Capability and Firm Performance: An Empirical Investigation , 2000, MIS Q..

[71]  Tor Guimaraes,et al.  Exploring the Importance of Business Clockspeed as a Moderator for Determinants of Supplier Network Performance , 2002, Decis. Sci..

[72]  Albert H. Segars,et al.  Knowledge Management: An Organizational Capabilities Perspective , 2001, J. Manag. Inf. Syst..

[73]  Edward Bernroider,et al.  IT governance for enterprise resource planning supported by the DeLone-McLean model of information systems success , 2008, Inf. Manag..

[74]  Mark I. H. Hwang,et al.  The use of meta-analysis in MIS research: promises and problems , 1996, DATB.

[75]  D. Teece.  Explicating dynamic capabilities: the nature and microfoundations of (sustainable) enterprise performance , 2007 .

[76]  Jerry N. Luftman.  Key Issues for IT Executives 2004 , 2005, MIS Q. Executive.

[77]  Eli Jones,et al.  High Touch Through High Tech: The Impact of Salesperson Technology Usage on Sales Performance via Mediating Mechanisms , 2008, Manag. Sci..

[78]  Elie Ofek,et al.  Manufacturer Benefits from Information Integration with Retail Customers , 2004, Manag. Sci..

[79]  M. Wade,et al.  Review: the resource-based view and information systems research: review, extension, and suggestions for future research , 2004 .

[80]  Albert H. Segars,et al.  The impact of IT on decision structure and firm performance: evidence from the textile and apparel industry , 2001, Inf. Manag..

[81]  William R. King,et al.  Understanding the Role and Methods of Meta-Analysis in IS Research , 2005, Commun. Assoc. Inf. Syst..

[82]  Ephraim R. McLean,et al.  The DeLone and McLean Model of Information Systems Success: A Ten-Year Update , 2003, J. Manag. Inf. Syst..

[83]  Jens Dibbern,et al.  Explaining Variations in Client Extra Costs Between Software Projects Offshored to India , 2008, MIS Q..

[84]  Kenneth L. Kraemer,et al.  Review: Information Technology and Organizational Performance: An Integrative Model of IT Business Value , 2004, MIS Q..

[85]  Terry Anthony Byrd,et al.  An Exploratory Analysis of the Value of the Skills of IT Personnel: Their Relationship to IS Infrastructure and Competitive Advantage , 2001, Decis. Sci..

[86]  Lior Fink,et al.  Exploring the perceived business value of the flexibility enabled by information technology infrastructure , 2009, Inf. Manag..

[87]  Waleed A. Muhanna,et al.  Information Technology and Process Performance: An Empirical Investigation of the Interaction Between IT and Non-IT Resources , 2008, Decis. Sci..

[88]  Michael R. Wade,et al.  The Resource-Based View and Information Systems Research: Review, Extension, and Suggestions for Future Research , 2004, MIS Q..

[89]  Kenneth L. Kraemer,et al.  Post-Adoption Variations in Usage and Value of E-Business by Organizations: Cross-Country Evidence from the Retail Industry , 2005, Inf. Syst. Res..

[90]  William R. King,et al.  Measuring the Performance of Information Systems: A Functional Scorecard , 2005, J. Manag. Inf. Syst..

[91]  Hüseyin Tanriverdi,et al.  Performance Effects of Information Technology Synergies in Multibusiness Firms , 2006, MIS Q..

[92]  Toni M. Somers,et al.  The Impact of ERP Implementation on Business Process Outcomes: A Factor-Based Study , 2007, J. Manag. Inf. Syst..

[93]  Abraham Seidmann,et al.  An Empirical Investigation of the Value of Integrating Enterprise Information Systems: The Case of Medical Imaging Informatics , 2009, J. Manag. Inf. Syst..

[94]  Waleed A. Muhanna,et al.  IT capabilities and firm performance: A contingency analysis of the role of industry and IT capability type , 2009, Inf. Manag..

[95]  Rajiv Kohli,et al.  Measuring Information Technology Payoff: A Meta - Analysis of Structural Variables in Firm - Level Empirical Research , 2003, Inf. Syst. Res..

[96]  Yuliang Yao,et al.  Private Network EDI vs. Internet Electronic Markets: A Direct Comparison of Fulfillment Performance , 2009, Manag. Sci..

[97]  Shu Lin,et al.  Plant Information Systems, Manufacturing Capabilities, and Plant Performance , 2006, MIS Q..

[98]  Arun Rai,et al.  Firm performance impacts of digitally enabled supply chain integration capabilities , 2006 .

[99]  D. Teece,et al.  DYNAMIC CAPABILITIES AND STRATEGIC MANAGEMENT , 1997 .

[100]  Varun Grover,et al.  Examining the Impact of Interorganizational Systems on Process Efficiency and Sourcing Leverage in Buyer-Supplier Dyads , 2005, Decis. Sci..

[101]  Vijay Gurbaxani,et al.  Investigating the Risk-Return Relationship of Information Technology Investment: Firm-Level Empirical Analysis , 2007, Manag. Sci..

[102]  Andrew B. Whinston,et al.  An Empirical Investigation of Net-Enabled Business Value , 2004, MIS Q..

[103]  B. Wernerfelt,et al.  A Resource-Based View of the Firm , 1984 .

[104]  Prashant Palvia,et al.  Research Models in Information Systems , 2006, Commun. Assoc. Inf. Syst..

[105]  Eric Walden,et al.  The Impact of E-Commerce Announcements on the Market Value of Firms , 2001, Inf. Syst. Res..

[106]  Varghese S. Jacob,et al.  Strategic IT Investments: The Impact of Switching Cost and Declining IT Cost , 2007, Manag. Sci..

[107]  Toni M. Somers,et al.  Erratum: "The role of information systems resources in ERP capability building and business process outcomes" (Journal of Management Information Systems (2007) vol. 24 (2)) , 2007 .

[108]  Sarv Devaraj,et al.  The Impact of Information Technology Investments and Diversification Strategies on Firm Performance , 2007 .

[109]  Rajiv D. Banker,et al.  Value Implications of Investments in Information Technology , 2006, Manag. Sci..

[110]  Jonathan Whitaker,et al.  Information Technology, Production Process Outsourcing, and Manufacturing Plant Performance , 2006, J. Manag. Inf. Syst..

[111]  Mani Subramani,et al.  How Do Suppliers Benefit from Information Technology Use in Supply Chain Relationships? , 2004, MIS Q..