Information Technology Infrastructure Capability's Impact on Firm Financial Performance: An exploratory Study

Abstract

This paper explores the relationship between information technology infrastructure capabilities and firm performance. Return on sales is utilized as the measure of firm performance, due to its ability to indicate a firm's competitive advantage and resource/competitive flexibility. Utilizing existing measures an instrument was used which addressed the multiple dimensions of IT infrastructure. Eight factors were found to significantly effect return on sales. Modularity, technical specialty knowledge, support activity efficiency, and resource acquisition functionality positively effected firm performance. While primary activity efficiency, resource management functionality, threat and premptiveness positively effected firm performance. Empirical evidence is provided and theoretical explanations are explored. Finally, limitations of the study as well as future research are discussed.