Understanding and Extracting Value from Information Technology (IT) Investments

EII Taskforce

SUMMARY

Main research question:  Organisations invest millions of dollars each year on IT infrastructure, hardware, software, and services.  One of the vexing research concerns in this context is the need to understand the complex relationships    between IT investments, patterns of IT usage, and the realised value. This taskforce will address a range of related questions at different levels of granularity and disaggregation.  It will also seek normative answers to the question of how value extraction from IT investments can be improved.

DURATION

The project will commence in April 2008 and will be completed by 30 June 2009.

TASKFORCE COORDINATOR/S

Joseph Davis, School of Information Technologies, The University of Sydney.

Shirley Gregor, Australian National University

SENIOR RESEARCH ADVISOR/MENTORS

Prof. Peter Weill

Director, Centre for Information Systems Research &
Senior Research Scientist
MIT Sloan School of Management

USA

Prof. Anitesh Barua

Professor and Director of Information Management Program

University of Texas, Austin, TX

USA

Prof. Sinan Aral

Dept. of Information, Operations and Management Sciences

Stern School of Business

New York University

New York

USA

TASKFORCE TEAM MEMBERS

Prof. Peter Love, Curtin University

Dr. Simon Poon, University of Sydney

Dr. Byounggu Choi, University of Sydney

Dr. Lee Boldeman, DCITA, Canberra

Prof. Peter Green, University of Queensland

Prof. Shirley Gregor, ANU

Prof. Christopher Lueg, University of Tasmania

Prof. Amanda Spink, QUT

Prof. Graeme Shanks, University of Melbourne

A/Prof. Joseph Davis, University of Sydney

TASKFORCE SIGNIFICANCE

Understanding the complex and multi-faceted relationships between IT strategy, governance mechanism, and the investment profiles and the extent to which they contribute to real business value has been an important research question for the filed for over two decades.  As well, these relationships are mediated by the diverse ways in which information is accessed and used by knowledge workers who constitute a growing proportion of the workforce.  This taskforce will address a range of research questions in this context with particular attention to the Australian conditions.

There is a general global consensus that developments in information technology (IT) in recent years have contributed to the emergence of what has been described as the ‘information economy’ characterised by significant productivity benefits at the macro level.  However, there is a critical need to understand the complex relationships between IT investments and business value at more micro-levels, as under-scored by policy makers, practitioners, and researchers.  This is particularly important for an economy such as Australia’s, characterised by a relatively weak IT production sector but significant strengths in the sophisticated use of IT.  However, the claims to sophisticated use of IT need to be researched comprehensively by empirically delineating and modelling diverse patterns of information access and use.  From a practical standpoint, it is also important to explicate, analyse, and evaluate the appropriate organisational mechanisms by which business use of IT contributes to improved performance. This project will adopt a disaggregated approach to the problem by which finely-grained models of the relationships between the different IT capital input categories, complementary business practices, patterns of use, and indicators of business value will be developed and tested using Australian data.  The outcomes will have the potential to generate evidence-based guidelines on the composition of IT investments at the firm level by analysing the differential effects of the components of IT capital (such as hardware, software, and labour or different types of IT applications such as Enterprise Resource Planning (ERP) systems, Supply Chain Management (SCM) systems, and Customer Relationship Management (CRM) systems) on a range of payoff measures.  It can also help provide useful recommendations to decision makers and policy analysts on how to achieve a closer fit between the various components of IT investments and appropriate organisational mechanisms. 

The taskforce will also address some of the key normative questions that can provide practical guidelines for managers and decision makers on policies for determining and allocating IT investments portfolios as well as for effectively managing the access and use of information.

TASKFORCE SCOPE

The main thrust of the taskforce work will be on IT investments and usage at the firm and IT application levels.   Productivity and business value benefits will also be investigated at both the firm and the individual knowledge worker levels.  The researchers already named in the proposal and others to be invited have significant previous research background and experience in this area.  While the exploration will be general, we expect to pay special attention to Australian conditions and data.  We will also seek to develop sound normative guidelines based on sound research as part of the taskforce activities.

[11] SPECIFIC MILESTONES, EVENTS or ACTIVITIES

The main milestones are the following:

·         A workshop focusing on the effects of IT investments disaggregated by hardware and software, infrastructure, and services and their effects on productivity and value at the firm and individual knowledge worker levels to be held in Sydney around Sept. 2008.

·         A second workshop to be held in February 2009 which will explore aspects of IT usage acess, usage and value.

·         An edited book including selected (and refereed) papers from the two workshops to be published in 2009

·         A seminar series by invited international and high profile researchers in the area.

·         A panel discussion at the ACIS’2008 in Christchurch, New Zealand in November 2008.

·         An ARC Discovery research proposal to be submitted by a group of the participating researchers in 2009.