Impact of information technology on organizational performance

Investment in IT is usually aimed at improving productivity, profitability and quality of operations but Devaraj and Kohli (2003) were unable to identify the impact of technology on organizational performance. Kelly (1994) discovered that the reason for the inability to properly explain the relationship between technology and the productivity is due to the unit of aggregate analysis on an organizational level which adds to the complexity of isolating the effects of any individual technology. He noted that the probability of finding the impact of its use depends on how the analysis is detailed. Devaraj and Kohli (2003) stated that the examination of the amount of money invested in IT can not provide accurate measurement of IT effectiveness as levels of use may differ between firms, sectors and processes. In their contribution to the debate on its impact fledging of use, Goodhue and Thompson (1995) explained that the coupling between the task and the technology should be established before the use can lead to impact on individual performance. To obtain the task-technology fit, technology, and the targeted application should be compatible and the availability of qualified users who use the technology (Goodhue and Thompson, 1995). This proposition implies that the IT infrastructure and business objectives of the organization should be in alignment.

The literature has shown that use of IT is no difference between the voluntary use of IT and mandatoriness. Subjective norm was found to affect mandatory IT use and were absent in voluntary use. In addition, it was observed that pay in technology typically does not occur instantaneously, but are made in the course of time (Devaraj and Kohli, 2003; Hartwick and Barki, 1994). Peffers and Dos Santos (1996) conducted a survey on the impact of IT in banks and noted that longitudinal studies that are made after applications are installed they can not give desired results, finding no benefits, even if their potential is of great benefits. Their study indicated that the impact of IT on performance became apparent after some delay and that benefits accrued over the first or the second wave.

References:

Devaraj, S., and Kohli, R. (2003). The performance impact of Information Technology:

And 'actual usage the missing link. Management Science, 49 (3), 273-289.

Goodhue, D.L, and Thompson, R. L. (1995). task technology fit and individual performance. MIS Quarterly, (19) 2, 213-236.

Hartwick, J., and Barki, J. (1994). Explain the role of user participation in information system. Scientific management. 40, 40-465.

Kelly, M. (1994). Productivity and Information Technology: The elusive connection. Management Science, 40 (11), 1406-1425

Peffers, K., and Dos Santos, L. (1996). Performance effects of innovative applications over time. IEEE Trans Engrg. Management, 43 (4), 381-392 .......