IT Pay-Off

Abstract

In-spite of intense research, the link between IT investment and IT pay-off in firms is still not well understood. Differences in ontological assumptions and inconsistent measures of IT pay-off are observed in prior research, leading to fragmented and inconclusive findings on return from IT investment. Difficulty in controlling for confounding factors of time lag between IT investment and availability of IT systems and IT enabled business processes, effects of non-IT managerial efforts such as marketing and finance, convolute findings from prior research. This research draws from stakeholder theory, goal-setting and expectancy theories of motivation, IT/Business alignment and IS success theories, and quality management literature and proposes a model of IT pay-off that partly controls for some of the stated confounding effects. Attempt is made to empirically demonstrate through the model that IT pay-off is better understood by shifting focus from dollar value of IT investment to the motivation for and qualities of systems and IT enabled business processes structured with the IT investment, and investigating their impacts on process quality, operational efficiency and specific firm performance measures that can be related to IT investment. Theoretical and practical implications are discussed.