Information Technology Investment and Commercialized Innovation Performance: Dynamic Adjustment Costs and Curvilinear Impacts

MIS Quarterly ◽  
2021 ◽  
Vol 45 (3) ◽  
pp. 1007-1024
Author(s):  
Prasanna Karhade ◽  
◽  
John Qi Dong ◽  
Keyword(s):  
Information Technology ◽  
Empirical Evidence ◽  
Broad Spectrum ◽  
Adjustment Costs ◽  
Innovation Performance ◽  
Curvilinear Relationship ◽  
Dynamic Adjustment ◽  
It Investment ◽  
Technology Investment ◽  
Information Technology Investment

Firms’ investment in information technology (IT) has been widely considered to be a key enabler of innovation. In this study, we integrate prior findings on the augmenting pathways (where IT investment supports innovation) with a new theory explaining the suppressing pathways (where dynamic adjustment costs associated with large IT investment can be detrimental to innovation) to propose an overall inverted U-shaped relationship between IT investment and commercialized innovation performance (CIP). To test our theory, we analyze a unique panel dataset from the largest economy in Europe and discovered a curvilinear relationship between IT investment and CIP for firms across a broad spectrum of industries. Our research presents empirical evidence corroborating the augmenting and suppressing pathways linking IT investment and CIP. Our findings serve as a cautionary signal to executives, discouraging overinvestment in IT.

Methods for measuring information technology investment payoff

1998 ◽  
Vol 17 (2) ◽  
pp. 145-153
Author(s):  
H. Joseph Wen ◽  
David C. Yen ◽  
Binshan Lin
Keyword(s):  
Information Technology ◽  
Decision Maker ◽  
Evaluation Process ◽  
It Investment ◽  
Technology Investment ◽  
Advantages And Disadvantages ◽  
Road Map ◽  
Information Technology Investment ◽  
Intangible Benefits ◽  
Risks Factors

Measuring information technology (IT) investment payoff is difficult. This is because most of IT benefits are qualitative, indirect, and diffuse. To actually measure IT investment payoffs, tangible and intangible benefits factors as well as risks factors must be identified and evaluated. This research studies ten major evaluation methods, and available models that fall under each method, showing their advantages and disadvantages in handling the above difficulties. A road map to guide the decision maker in choosing the most appropriate methodology in his/her evaluation process is provided.

Evaluating Information Technology Investment with New Information Economic (NIE): A Study Case Greenspan Packaging System Co. Ltd.

2019 ◽  
Vol 16 (12) ◽  
pp. 5151-5161
Author(s):  
Ibrahim Adhitya Ibarda Putra
Keyword(s):  
Information Technology ◽  
Business Process ◽  
Business Processes ◽  
Literature Analysis ◽  
It Investment ◽  
Packaging System ◽  
Technology Investment ◽  
New Information ◽  
Information Technology Investment ◽  
Study Case

The objectives of this research are to analyze the business process in the production division of Greenspan Packaging System Co. Ltd., to evaluate IT of the IT investment, and to give recommendations based on the result of the IT valuation in order to get an efficient budgeting for the company. Methods that were used in this research are analysis of the literature, analysis of the collected data by interviewing and observing the running business processes and the method of analysis that was used is the New Information Economic (NIE). Results achieved in this research are results of the IT evaluation in a form of values on IT that are used in the company in order to assess the alignment between the IT investment with the company’s strategic intentions. Conclusion of this research is the recommendation that given to company can help the company to achieve their vision and mission and also their strategic intentions with the help of recommended IT investment.

The Evaluation of Risky Information Technology Investment Decisions

2004 ◽  
Vol 18 (1) ◽  
pp. 53-66 ◽  
Author(s):  
Jacob M. Rose ◽  
Anna M. Rose ◽  
Carolyn Strand Norman
Keyword(s):  
Information Technology ◽  
Prospect Theory ◽  
Investment Decisions ◽  
Decision Makers ◽  
Risk Averse ◽  
It Investment ◽  
Technology Investment ◽  
Risk Seeking ◽  
Information Technology Investment ◽  
Domain Information

This research proposes that the risk preferences of decision evaluators and the decision “domain” systematically influence evaluations of decision makers' information technology (IT) investment decisions. Results of an experiment with 160 M.B.A. student participants indicate that risk-seeking evaluators rate IT investment decisions higher than do risk-averse evaluators. Further, decision evaluators are influenced by the gain and loss decision domains when evaluating a decision maker's risky information technology investment decisions. The findings indicate that providing decision domain information to decision evaluators leads to systematic differences in IT investment evaluations. A key contribution of this study is the discovery of the relevance of prospect theory to IT evaluation processes.

scholarly journals Information Technology Investment Strategy Planning: Balance Scorecard Approach

2011 ◽  
Vol 5 (1) ◽  
pp. 8
Author(s):  
Henny Hendarti ◽  
Iwan Kurniawan
Keyword(s):  
Information Technology ◽  
Field Studies ◽  
Investment Strategy ◽  
Investment Planning ◽  
Balance Scorecard ◽  
It Investment ◽  
Technology Investment ◽  
Information Technology Investment ◽  
Book Studies ◽  
Analysis System

Purpose of this research are to prepare the IT investment strategy using Balanced Scorecard approach in the company where the appropriate planning of this IT investment strategy can maximize the competitive benefit in the company, and it also to recommended a strategy of IT investment that can be implemented and measure the rate of return from the IT investment in the company. Research Method used book studies, field studies, and analysis system. Book studies from the books and journal. Field studies done by observation, interview, and questioner, and analysis system done by analyzed the ongoing system in the company. The result from this analysis is a recommendation in investment IT such as sales module, payment module, and report module. Then for the conclusion, this information technology investment planning can be develop to another investment implementation such authorized website of the company and using PDA (Personal Digital Assistant)Index Terms - Planning, Information Technology, Investment, Balance Scorecard

Small Indonesian Holding Company Of SME’s : Study on The Value on IT Investment : PT.XYZ Core

2019 ◽  
Vol 3 (1) ◽  
pp. 155-159
Author(s):  
Dodik Novianto
Keyword(s):  
Information Technology ◽  
Best Practices ◽  
Business Value ◽  
It Investment ◽  
It Investments ◽  
Technology Investment ◽  
Holding Company ◽  
It Managers ◽  
Information Technology Investment ◽  
The Cost

This paper explains that in PT.XYZ as SMEs do not have the IT integrated . IT managers perform checks on the company and find the condition that it is true in the enterprise IT integrated yet. In this paper further research requires a comparison with conducting surveys and studies in several large holding company. This is what causes the difficulty to estimate the cost and benefits of information technology investment Compared to investment value. (Money et al., 1995) share the benefits the use of information technology into two kinds, tangible and intangible . This has the caused many organization have difficulty how to calculate the cost and benefit of the investment associated with the resulting benefits and using Val IT one of the solution to study on the value on IT investments in SMEs at PT.XYZ . Val IT is now, the realization of business value of a clear investment, measured monitoring, to provide a means to optimize, and add the best practices for the end.

Information technology investment and innovation performance: does investment paradox exist?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Peinan Ji ◽  
Xiangbin Yan ◽  
Yan Shi
Keyword(s):  
Information Technology ◽  
Time Lag ◽  
Innovation Performance ◽  
Test Model ◽  
It Investment ◽  
Firm Innovation ◽  
Data Set ◽  
Content Type ◽  
Lag Effect ◽  
Enterprise Innovation

Purpose The purpose of this study is to deepen the understanding of the effects of information technology (IT) investment on firm innovation performance and examining the investment paradox effect in China. Design/methodology/approach Using a sample of China’ public firms IT investment data between 2010 and 2016, the authors establish a test model of IT investment and innovation performance. Findings The result indicates that IT investment in firms have no effect on innovation performance in the investment period. However, in the full sample and manufacturing sample, the IT investment has a significant positive effect on innovation performance in the post-investment years. In addition, this study finds that large companies and low-age companies may contribute more to innovation when firm investment in IT. Research limitations/implications There are several limitations in this research. First, the authors are failed to obtain a larger sample about the IT investment information data set in China, so this study was compelled to use limited sample data from China, hence, this could lead to errors of too early generalization. Second, the authors use the number of invention patent applications to represent the performance of enterprise innovation, which may not show enterprise innovation effectively. Third, the firms in the sample are all in China Listed Companies, so this may not accurately reflect the entire environment of firm innovation performance, and could possibly. Practical implications The research confirms that there is a paradox and time lag effect in IT investment, which enterprises should pay attention to. Originality/value Existing research confirms that corporate IT investments can bring new products or services. However, the authors still do not know whether IT investment has improved the company’s ability of innovation. This study will fill this gap and the industry effect and time lag effect of the influence of IT investment on innovative performance are also examined.

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