IT, Business Processes & Performance

IT, Business Processes & Performance

Robert van Wessel (Tilburg University, Netherlands)
DOI: 10.4018/978-1-61520-759-6.ch003
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This chapter describes literature about IT investments, and the impact of IT on the performance of a firm. The reason for this study is that effects of IT standards, which are an integral part of IT, will be investigated in several case studies. Supporting the case study analysis, a method will be adopted that is used to assess business performance from IT in general. Business performance in general can be assessed from different angles, such as financial performance, process performance and transaction performance. Literature from various disciplines shows the complexity of and the disagreement as regards measurement and description of business performance. However, it is generally accepted that these impacts can be assessed best at the intermediate level: that of business processes. After the introduction, literature dealing with IT value and business performance will be discussed. Then a specific method, the Balanced Scorecard, will be dealt with and an explanation is given why we used it in this research. This chapter concludes with a look at the concept of flexibility, as part of business performance, and what it means in relation to IT standards.
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The Value Of It

The task of measuring the real costs and benefits of IT and IT investments is a notoriously complex problem (Brynjolfsson and Hitt, 1998) as there are tangibles & intangibles and direct & indirect costs and benefits involved. In spite of a lot of research in this field, there is still no generally accepted framework. The majority of studies have focused on productivity as the measure of IT value, whereas others have used profit or have focused on the impact of IT on intermediate performance measures such as product quality and output levels as the measure of IT value (Thatcher and Pingry, 2004). Melville et al. (2004) developed a process-oriented model to assess the impact of IT on business activities.

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