Based in the Silicon Valley, Antoine Chaya has an extensive technology leadership background with Oracle Corp. While a doctoral student at the Georgia Institute of Technology in 1996, Antoine Chaya presented at the 29th Annual Hawaii International Conference on System Sciences. He spoke on “Exploring the Relationships Between IT Investments and Organizational Performance.”
As the author describes it, previous studies had been inconsistent and not demonstrated the bottom line positive impacts one would expect from IT investments. Potential reasons for this included limited available data, weak analytical techniques, and inherent challenges in quantifying the often intangible benefits that IT deployment brings. Despite this inconclusive evidence, the anecdotal case for significant IT benefits continued to be “tempting and intuitive.”
With a focus on major corporations, the author employed preliminary empirical evidence spanning a 609 company database across the years 1988 and 1992. The statistical analyses conducted suggested a robust link between IT investment and corporate benefits, with elevated IT spending levels associated with decreased operating expenses (as a percentage of sales). In addition, higher business operating margins were associated with higher IT spending levels.
Interestingly, there was a much greater relationship between IT investment and reduced operating expenses when the performance measure lagged by a two-year period. This points to what one researcher has called a “productivity paradox,” in which IT benefits may not manifest in quantifiable ways for two to three years.
As the author describes it, previous studies had been inconsistent and not demonstrated the bottom line positive impacts one would expect from IT investments. Potential reasons for this included limited available data, weak analytical techniques, and inherent challenges in quantifying the often intangible benefits that IT deployment brings. Despite this inconclusive evidence, the anecdotal case for significant IT benefits continued to be “tempting and intuitive.”
With a focus on major corporations, the author employed preliminary empirical evidence spanning a 609 company database across the years 1988 and 1992. The statistical analyses conducted suggested a robust link between IT investment and corporate benefits, with elevated IT spending levels associated with decreased operating expenses (as a percentage of sales). In addition, higher business operating margins were associated with higher IT spending levels.
Interestingly, there was a much greater relationship between IT investment and reduced operating expenses when the performance measure lagged by a two-year period. This points to what one researcher has called a “productivity paradox,” in which IT benefits may not manifest in quantifiable ways for two to three years.