Fact or Fiction? A Sensemaking Perspective on the Reality Behind Executives' Perceptions of IT Business Value

TLDR

Research on IT performance has advanced, yet the lack of readily available objective process-level metrics hampers studies, and critics argue that relying on executives’ perceptions introduces bias. The study applies sensemaking theory to examine whether executives’ perceptions accurately reflect IT impacts. The authors develop a model linking executives’ observations of process-level IT effects to sensemaking-based perceptions and firm performance, which serves as the benchmark for accuracy. Surveying executives in 196 firms, the model shows that their perceptions largely align with actual IT impacts, though not perfectly, suggesting that executive views warrant greater attention in IT value research. © 2007 M.E.

Abstract

Author(s): Tallon, PP; Kraemer, KL | Abstract: Although research has made significant strides in recent years in evaluating the performance impacts from information technology (IT), a dearth of easily accessible objective measures, particularly at the process level, continues to limit IT research. Suggestions that researchers use perceptual measures instead are met with claims that the biased nature of perceptions renders them imperfect proxies for the true extent of IT impacts. In this paper, we use sensemaking theory to explore this claim. We outline a model relating what executives notice about process-level IT impacts with sensemaking-based perceptions of IT impacts at the firm level, and firm performance as the ultimate arbiter of perceptual accuracy. Estimating the model with survey data from executives in 196 firms, we find that executives' perceptions are more fact than fiction. While perceptions are not a perfect proxy for hard-to-find objective measures, perceptual accuracy should stimulate greater consideration of executives' perceptions in future IT business value research. © 2007 M.E. Sharpe, Inc.