Organizational Performance and IT Investment Intensity of South African Companies

Abstract

This chapter considers if a link exists between company performance and information technology (IT) investment intensity in selected South African companies. The study, which covered the period 1989–1991, was based on the hypotheses viz: that in top performing companies (1) IT costs as proportions of operating costs were higher; (2) IT costs as a proportion of turnover was lower, than in weak performing companies; and (3) that a positive correlation exists between the computerization index and operating cost efficiency ratio. Evidence is presented that company performance was linked to the level of IT investment intensity in a sample of organizations in the RSA. Findings of later case study research supporting this are also presented.