Impact of IT investment on firm performance

Abstract

As the adoption and integration of IT by organizations has become a competitive necessity, organizations make considerable investments in information technology infrastructure in the expectation that it will help improve organizational performance. However, making investment in IT itself is not sufficient, firms must integrate into their strategic management process. This study considers the role of managerial process and organizational resources as important complementary factors for firm to get best performance with regard to their IT investment. Based on the model which investigates how IT investment affects 6 independent variables of firm performance: firm growth, market competitiveness, customer relations, partnership with providers, operational efficiency and employment efficiency, we will test the role of four moderators which are role of CIO, mobile technology adoption, IT support and maintenance and IT outsourcing. The results indicate that the impact of IT investment had positive effects on five performance variables except employment efficiency, In the case of moderating effect, IT support and maintenance showed positive moderating effect partially on relationship between IT investment and firm performance variables while IT outsourcing showed negative moderating effect partially on relationship between IT investment and firm performance. There was no moderating effect of role of CIO and mobile technology adoption in this study as expected.