Journal Press India®

Rationalization of Productivity of Information Technology through Business Value

Vol 17 , Issue 1 , January - June 2016 | Pages: 55-64 | Research Paper  

https://doi.org/10.51768/dbr.v17i1.171201615


Author Details ( * ) denotes Corresponding author

1. * Tarun Kumar Singhal, Professor, Symbiosis Institute of Telecom Management, Constituent of Symbiosis International University, Pune, Maharashtra, India (dr.tarun@rediffmail.com)
2. Smrita Sinha, Assistant Professor, Amity Business School, Amity University, Noida, Uttar Pradesh, India
3. Anubha Vashisht, Assistant Professor, Symbiosis Center for Management Studies, Constituent of Symbiosis International University, Noida, Uttar Pradesh, India

Purpose: To ascertain impact of IT in creation of employee value, customer value, shareholder value, and managerial value as a part of business value which in turn increases the overall productivity
and profitability in organizations.
Design/Methodology/Approach: The primary data used in the following research have been collected from over 200 Indian organizations through Ministry of Statistics and Program Implementation. While the managerial and shareholder value data were calculated, the employee satisfaction and customer value data was originally collected as a part of surveying program by the Ministry with questionnaires having appropriate level of acceptance for empirical analysis. For the analysis, simple linear model is used based on the linear regression relation in each of the four hypotheses. 
Linear regression is an approach to the linear model which aims in establishing relation between scalar dependent variable (namely Y) with an independent variable X. As only one independent variable is present, linear regression is being used instead of unified multiple regressions. Linear regression equation is given by y = ax+c where y is the measured variable or regress, and c is numeric constant. For classification of data and tests of correlation, mean, mode, variance and standard deviation of the datasets has been found.
Findings: The present empirical analysis supports the previous researches and propositions that IT generates customer satisfaction as well as investment or shareholder value. However, it contradicts the productivity paradox which stated that employee satisfaction has decreased by significant levels after the implementation of IT. 
Research Limitations/Implications: Thus, according to our empirical research and analysis, implementation of IT with an aim to attract investment and produce quality products while maintaining employee goodwill generates huge business value, and increases the productivity of the organization. Thus, business value should be considered as a crucial determinant of productivity through IT.
Practical Implications: The correct implementation and intelligent application of the available IT resources can surely revolutionize the technology based world in this globalization era. However, the key factors always need to be taken under consideration so that, the development takes place in the right direction. Business value generation with IT aims to achieve sustainable development of the organization along with its employees, shareholders and customers.
Originality/Value: The paper provides evidence of contribution of IT in generation of business value. The research has included key performance indicators such as employee value, customer value, shareholder value and managerial value as a part of business value for the purpose of determining whether or not they are influenced by IT. It also provides important insights to the decision makers to visualize IT in the appropriate dimensions of overall productivity.

Keywords

Information Technology, Business Value, Productivity, Customer Value, Employee Value.

  1. Allen, T.J. (1986). Organizational structure, information technology, and R&D productivity. Engineering Management, IEEE Transactions on Engineering Management, 33(4), 212-217.
  2. Anderson, E.W., Fornell, C., & Mazvancheryl, S.K. (2004). Customer satisfaction and shareholder value. Journal of Marketing, 68(4), 172-185.
  3. Barney, J.B. (1986). Organizational culture: can it be a source of sustained competitive advantage? Academy of Management Review, 11(3), 656-665.
  4. Bartel, A.P., Ichniowski, C., & Shaw, K.L. (2005). How does information technology really affect productivity? Plant-level comparisons of product innovation, process improvement and worker skills (No. w11773). National Bureau of Economic Research.
  5. Bharadwaj, A.S. (2000). A resource-based perspective on information technology capability and firm performance: an empirical investigation. MIS Quarterly, 24(1), 169-196.
  6. Black, S.E., & Lynch, L.M. (2001). How to compete: The impact of workplace practices and information technology on productivity. Review of Economics and Statistics, 83(3), 434-445.
  7. Bowman, E.H., & Hurry, D. (1993). Strategy through the option lens: An integrated view of resource investments and the incremental-choice process. Academy of Management Review, 18(4), 760-782.
  8. Brynjolfsson, E. (1993). The productivity paradox of information technology. Communications of the ACM, 36(12), 66-77.
  9. Brynjolfsson, E., & Yang, S. (1996). Information technology and productivity: A review of the literature. Advances in computers, 43, 179-214.
  10. Brynjolfsson, E., & Hitt, L.M. (2001). Beyond computation: Information technology, organizational transformation and business performance. The Journal of Economic Perspectives, 14(4), 23-48.
  11. Devraj, S., & Kohli, R. (2001). The IT payoff: measuring the business value of information technology investments. Upper Saddle River: Financial Times/Prentice Hall.
  12. Emrouznejad, A., Parker, B.R., & Tavares, G. (2008). Evaluation of research in efficiency and productivity: A survey and analysis of the first 30 years of scholarly literature in DEA. Socio-Economic Planning Sciences, 42(3), 151-157.
  13. Gale, B., & Wood, R.C. (1994). Managing customer value: Creating quality and service that customers can see. New York: Simon and Schuster.
  14. Hitt, L.M., & Brynjolfsson, E. (1996). Productivity, business profitability, and consumer surplus: Three different measures of information technology value. MIS Quarterly, 20(2), 121-142.
  15. Karimi, J., Somers, T.M., & Gupta, Y.P. (2001). Impact of information technology management practices on customer service. Journal of Management Information Systems, 17(4), 125-158.
  16. Mahmood, M.A., Burn, J.M., Gemoets, L.A., & Jacquez, C. (2000). Variables affecting information technology end-user satisfaction: a meta-analysis of the empirical literature. International Journal of Human-Computer Studies, 52(4), 751-771.
  17. Melville, N., Kraemer, K., & Gurbaxani, V. (2004). Review: Information technology and organizational performance: An integrative model of IT business value. MIS Quarterly, 28(2), 283-322.
  18. Mooney, J.G., Gurbaxani, V., & Kraemer, K.L. (1996). A process oriented framework for assessing the business value of information technology. ACM SIGMIS Database, 27(2), 68-81.
  19. Parasuraman, A., & Grewal, D. (2000). The impact of technology on the quality-value-loyalty chain: a research agenda. Journal of the Academy of Marketing Science, 28(1), 168-174.
  20. Ray, G., Muhanna, W.A., & Barney, J. B. (2005). Information technology and the performance of the customer service process: A resource-based analysis. MIS Quarterly, 29(4), 625-652.
  21. Short, J.E., & Davenport, T.H. (1990). The new industrial engineering: Information technology and business process redesign. MIT Sloan Management Review, 31(4), 11-27.
  22. Slater, S.F., & Narver, J.C. (2000). Intelligence generation and superior customer value. Journal of the Academy of Marketing Science, 28(1), 120-127.
  23. Smith, J.B., & Colgate, M. (2007). Customer value creation: a practical framework. Journal of Marketing Theory and Practice, 15(1), 7-23.
Abstract Views: 9
PDF Views: 317

Advanced Search

News/Events

Institute of Managem...

Deccan Education Society Institute of Management Development and Re...

S.B. Patil Institute...

Pimpri Chinchwad Education Trust's S.B. Patil Institute of Mana...

D. Y. Patil IMCAM, A...

D. Y. Patil Institute of Master of Computer Applications & Managem...

Vignana Jyothi Insti...

Vignana Jyothi Institute of Management International Conference on ...

Department of Commer...

Department of Commerce, Faculty of Commerce & Business, University...

Birla Institute of M...

Birla Institute of Management Technology (BIMTECH) 3rd Pritam Singh M...

OP Jindal University...

OP Jindal University, India 4th International Conference on  ...

Department of MBA, N...

Department of MBA, Narayana Engineering College Nellore International...

Vignana Jyothi Insti...

Vignana Jyothi Institute of Management Conference Proceedings,...

Online Proceedings R...

Conference Proceedings, March 2023 ISBN: 978-81-956810-6-8 ...

By continuing to use this website, you consent to the use of cookies in accordance with our Cookie Policy.