An exploration of the impact of information technology investment on organizational performance: An integrative approach

As investments in Information Technology (IT) have continuously increased, substantiating the real value of IT investments has been a major concern. Numerous previous studies have attempted for better assessment of the IT investment impact on organizations, but overall results of previous research have been inconclusive. This research attempts to explore the impact of IT investments on organizational performance using different techniques. We incorporate both quantitative analyses and a case study and investigate the overall impact of IT investments on organizational performance.; Our quantitative analyses include two data mining techniques—regression trees (RT) and multivariate adaptive regression splines (MARS). No previous studies have used these techniques in IT productivity research although these techniques have been successfully applied in other fields. While regression trees have been known a popular data mining technique, applications of MARS in business have been very rare. Thus, this study introduces MARS in business application.; This dissertation employs two different longitudinal datasets that have been used in the previous studies. Thus, results from the each dataset provide a valuable piece of a total picture in understanding the impact of IT investments on organizational performance. The research findings from the regression trees and MARS are compared with those from the regression analysis.; In addition, this research incorporates a case study to complement the quantitative research. Our case study includes organizational contextual factors, which are being recognized as valuable moderators between the IT investments and organizational performance in the previous studies. We develop a conceptual model, based on the model of Soh and Markus (1995), which includes two integrated processes. We examine if these contextual factors moderate the relationship between IT investments and organizational performance and attempt to identify intangible (or qualitative) benefits that are being recognized from IT investments. Based on the empirical findings, our conceptual model is refined.; We believe that the findings from the data mining techniques provide additional insights in understanding the impact of IT investments on organizational performance. We also found that organizational factors that are included in two processes moderate the relationship between IT investments and organizational performance. By using an integrative approach, our research provides richer insights into the impact of IT investments at the firm level.