The Impact of IT Investment in South African E-Commerce SME Organizations

Abstract

This chapter considers the possibility of a link between organisational performance and information technology (IT) investment intensity in SME organisations practising e-commerce for the period 2001/2002. The answers to the research questions note that in top performing organisations; (1) IT costs as proportions of operating costs were higher; (2) IT costs as a proportion of turnover was lower, than in weak performing organisations; and (3) that a positive correlation exists between the computerisation index (CI) and the operating costs ratio. The investigation also reveals that chief executive officers (CEO)’s expect additional output while planning e-commerce operations and keeping IT budgets constant. Evidence is presented that company performance is linked to the level of IT investment intensity in the sample of organisations investigated, even though more output was expected from the IT department.