Measuring it Performance: “Contingency” Variables and Value Modes

Abstract

The magnitude of investment in and the results expected from Information Technology (IT) is burgeoning equally rapidly. The rise in expectations is, however, not accompanied by an enhanced sophistication in the methods used to assess the outcomes of IT employment. Putting IT to multiple uses demands that measures of performance also be flexible and multidimensional. The traditional approach to measuring performance as the ratio between input and output is inadequate in this context. Several studies have utilized some form of input/output production function in measuring the impact of IT on profitability and productivity. There is a great need for taking a comprehensive look at the purpose and strategy underlying IT management and performance (“success”) measurement. Several classifying frameworks have been proposed and our research builds on this body of work. We propose an IT Effectiveness Model that links factors such as the external Environment, Strategy, Structure, and Culture to the mode of IT Deployment (e.g. Cost/Service/Investment Center). The objective of this model is to identify the appropriate measures of performance for each mode of deployment.