This article presents an executive overview of the article "The Implications of Information Technology Infrastructure for Business Process Redesign," by Marianne Broadbent, Peter Weill and Don St. Clair.
The article discusses the paper "Assessing the Health of an Information Systems Applications Portfolio: An Example from Process Manufacturing," by Peter Weill and Michael Vitale.
Large amounts of resources have been and continue to be invested in information technology (IT). Much of this investment is made on the basis of faith that returns will occur. This study presents the results of an empirical test of the performance effects of IT investment in the manufacturing sector. Six years of historical data on IT investment and performance were collected for 33 valve manufacturing firms from the CEO, the controller and the production manager in each firm. Investment was perceptually categorized by management objective (i.e., strategic, informational and transactional) and tested against four measures of performance (sales growth, return on assets, and two measures of labor productivity). Heavy use of transactional IT investment was found to be significantly and consistently associated with strong firm performance over the six years studied. Heavy use of strategic IT was found to be neutral in the long term and associated only with relatively poorly performing firms in the short term. This study suggests that early adopters of strategic IT could have spectacular success but once the technology becomes common, the competitive advantage is lost. In addition, the context of the firm was included in the analysis. Conversion effectiveness, which measures the quality of the firm-wide management and commitment to IT, was found to be a significant moderator between strategic IT investment and firm performance.
This paper explores the use of contingency theory in the field of Management Information Systems (MIS). The development of contingency theory in MIS is compared to the development of organization theory. The assumptions of fit, performance as a dependent variable, rational actors, and a deterministic model in both organizational research and MIS research are critiqued. The dominant influence of contingency theory is demonstrated through a review of empirical studies published in JMIS and MIS Quarterly. Of the 177 articles during the period studied, 59 percent were empirical and over 70 percent of these were judged to follow a contingency model. Based on our assessment of this research, we conclude that research in MIS has been hampered by the use of a naive meta-theory, conflicting empirical results with low explained variance, ill-defined concepts of performance and fit, and a narrow perspective of researchers. We give some recommendations for improving the theoretical basis of MIS, including advocating more subjectivist, less functional, and less deterministic research approaches. We also suggest a wider selection of methodologies including qualitative case studies, longitudinal studies, and ethnographic approaches. Finally, we conclude that significantly more theory-building is required in defining the MIS construct.
While businesses are investing enormous resources in information technology (IT), there is little evidence linking IT investment to organizational performance. The purpose of this article, therefore, is to increase understanding of the basis for IT investment in firms. Six mini case studies of companies in five different industries address questions of how they define IT for the purpose of determining the level of investment, how they track IT investments, and what other factors influence IT investment decisions. Each organization uses a different definition of IT, but there appears to be an overall trend to broaden the definition. Although companies track IT investment with varying degrees of rigor, they appear to be generally moving toward centralized tracking of all IT investment. Political considerations are important and significantly impact investment decisions. In all cases, the effectiveness with which IT investment is converted to useful output is acknowledged to be affected by the implementation process, the culture of the organization, and the skill of management. Three major implications for practitioners responsible for IT investment are: the need to adopt a broad definition of IT and track it over time against a convenient base; the need to separate different types of investment and match them to appropriate organizational performance measures; and the need to take into account factors such as management commitment and previous experience with IT. The latter impacts the effectiveness with which the firm converts it investment into useful outputs.