The transformational dimension in the realization of business value from information technology

Econometric studies have highlighted factors that appear to explain the differential effects of information technology (IT) on productivity at the firm level. Central to these explanations is the concept of organizational transformation; that value realization from IT depends on time-consuming investments in organizational change and results in new, often intangible, organizational assets. The aim of this study was to further investigate the concept of IT-enabled organizational transformation as a component of the value realized from IT at the firm level. Survey data was analyzed from respondents from 1050 businesses of varying sizes and across industries. Transformational benefits were found to exist as a distinct benefit category and to be closely related to other forms of IT-generated business benefits. They were also an important component of overall IT business value. Qualitative data illustrated these findings and pointed to possible complex causal relationships in the generation of IT value. The findings have implications for models of IT business value generation and for managerial practice. (c) 2006 Elsevier B.V. All rights reserved.