Model The Relationship Between It Investment And Business Performance Improvement Study

The coming of information technology has been seeing as a start of new revolution. But firms' investment on IT was not in proportion to returns, as so-called IT productivity paradox.In order to explain this paradox, scholars were trying to introduce resource-based view of firm (RBV). And as IT was becoming common resource of every firm, the construct of IT capability has been introduced later. IT capability theory can explain IT productivity paradox at some degree, but as field study has just been started in China mainland, especially in information system circle, there were so many cases that confusing mediator and moderator, including IT capability study either.We proposed an improved relation model of IT invest and firm performance, based on deep literature review and former relation models. We defined the constructs of IT resources and IT capability, taking IT capability a moderator, not mediator as usual. All of the variables in our model have been operationalized and scaled by questionnaire items. The validity and reliability of our model have been testified through questionnaire and data analyze, using methods confirmed by former researchers. IT productivity paradox can be explained much more explicitly within this model. We also expatiated the significance to theory model construct and field study in IS circle of identifying mediator and moderator.This study confirmed that firms' IT investment has nothing to do with firms' IT-human resources but only IT infrastructure resource. The way you blaming IT itself, when IT investment was increasing and no returns' coming, is not acceptable. Our study is of help to understand the position of IT in firms.