Information Technology Investments: A Literature Review

Information technology (IT) investment and aligning methodologies require thorough understanding of analyses on different parallel present values and strong internal rates of return. E-commerce has given a new dimension to IT investing that elevates the role of strong IT performance as a driver of corporate strategy. Stakeholders concerned with maximizing IT return on investment (ROI) recognize the importance of central, comprehensive information resources to effective strategic business planning. Alignment of corporate and IT strategies is now a vital element of business success. To empirically support this conclusion, this study measures the relationship between strategic alignment of IT investment returns and corporate performance. A Descriptive research design using survey methodology was employed. The study included analyses of variable values involving stakeholders in banks, such as new customers and employees. A Simple Percentage Method, chi-square tests, Tables and weighted average were used to analyze data of at least five (5) banks in Ajman Emirates of UAE to determine the degree of alignment and its impact on the two strategic dimensions. A binary logistic regression analysis using Chan's STROIS model incorporated with Venkatraman's STROBE model was proposed to collect survey data and determine the extent of the strategic alignment. The research results provide empirical evidence that supports the hypothesis that closer alignment between corporate and IT strategies leads to increased IT ROI and improved corporate performance. This relationship holds true for all firms regardless of strategic intent for IT. The study also shows a positive correlation between early adoption of newly emergent technologies and business competitive advantage which leads to positive conclusions that strategic competition is imperative towards corporate performances.

Information & Management, 2006

Journal of Computer Science

2009

Journal of Management Information Systems, 2007

2003

Although researchers have encouraged further exploration on the causal links between Information Technology (IT) investments and a firm’s competitive advantage, outcomes of empirical studies have been non-conclusive. This is to a certain extent owing to the omission of IT-business strategic partnership (also known as strategic alignment). Indeed, strategic alignment has emerged as one of the most important issue facing business and IT executives all over the world. Importance aside, what is not clear is how to achieve and sustain this harmony relating business and IT. Therefore, scholars have continuously called for research that addresses the antecedent factors that lead to the alignment. In addition, some scholars have called for further adjustments to the concept of alignment by applying new theoretical approaches which have not been explored in the field of information systems (IS). Therefore, the purpose of this paper is to provide a detailed roadmap in which practitioners can use to understand the resources required to realize the potential values of their IT investments. This could be achieved by presenting further insight to the factors that could lead to strategic alignment; and investigating the relationships among strategic alignment antecedents, strategic alignment and competitive advantage.