What you do not know about Beyond the IT productivity paradox!

Information Technology and Organizational Performance

Despite the massive investments in Information Technology in the developed economies, the IT Impact on productivity and business  performance Continues to be questioned. This article critically Reviews this IT productivity paradox debate and Finds that an important part, but by no means all, Of the uncertainty about the IT payoff relates to Weaknesses in measurement and evaluation Practice. Based on  extensive research by the Authors and others, an integrated systems lifecycle approach is put forward as a long term Way of improving evaluation practice in work Organizations.

The article shows how to link business and IT/IS strategies with prioritizing investments in IT, And by setting up a set of interlinking measures, How IT costs and benefits may be evaluated and Managed across the systems lifecycle, including Consideration of potential uses of the external IT Services market. An emphasis on a cultural Change in evaluation from ‘control through Numbers’ to a focus on quality improvement Offers one of the better routes out of the Productivity paradox. Improved evaluation Practice serves to demystify the paradox, but also Links with and helps to stimulate improved Planning for management and use of IT, thus also Reducing the paradox in practical terms – through The creation of greater business value.

The history of numerous failed and disappointing Information Technology (IT) investments in work organizations has been richly documented. (Here IT refers to the convergence of computers, telecommunications and electronics, and the resulting technologies and  techniques.) The 1993 abandonment of a five year project like Taurus in the UK London financial markets, in this case at a cost of £80 million to the Stock Exchange, and possibly £400 million to City institutions, provides only high profile endorsement of underlying disquiet on the issue. Earlier survey and case research by the present authors established IT investment as a high risk, hidden cost business, with a variety of factors, including size and complexity of the project, the ‘newness’ of the technology, the degree of ‘structuredness’ in the project, and major human, political and cultural factors compounding the risks (Willcocks and Griffiths, 1994; Willcocks and Lester, 1996).

Alongside, indeed we would argue contributing to the performance issues surrounding IT, is accumulated evidence of problems in evaluation together with a history of general indifferent organizational practice in the area (Farbey et al. , 1992; Strassman, 1990). In this module we focus firstly on the relationship between IT performance and its evaluation as it is expressed in the debate around what has been called the ‘IT productivity paradox’. A key finding is that assessment issues are not straightforward, and that some, though by no means all, of the confusion over IT performance can be removed if limitations in evaluation practice and measurement become better understood. From this base we then provide an overall conceptualization, with some detail, about how evaluation practice itself can be advanced, thus allowing some loosening of the Gordian knot represented by the IT productivity paradox.

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