Exploration of Information System Process Improvements and Firm Performance

Abstract

While substantial research has investigated the impact of IT on firm performance, for the most part, this research only considers the tangible aspect of IT, such as IS infrastructure. Intangible aspects of IT, such as IS-related processes, have been investigated in regard to the impact of project performance, but do not consider overall firm performance. This study is an exploration of the gap between these streams of research, and investigates the impact of IS-related process improvements on firm performance. Public CMM level transition announcements were used as events for an event-study methodology to assess the impact of these announcements on firm stock prices. The study found that through a variety of event windows, CMM level transitions consistently had a positive impact on stock price.