Fact or Fiction? A Sensemaking Perspective on the Reality Behind Executives' Perceptions of IT Business Value

Abstract

Author(s): Tallon, PP; Kraemer, KL | Abstract: Although research has made significant strides in recent years in evaluating the performance impacts from information technology (IT), a dearth of easily accessible objective measures, particularly at the process level, continues to limit IT research. Suggestions that researchers use perceptual measures instead are met with claims that the biased nature of perceptions renders them imperfect proxies for the true extent of IT impacts. In this paper, we use sensemaking theory to explore this claim. We outline a model relating what executives notice about process-level IT impacts with sensemaking-based perceptions of IT impacts at the firm level, and firm performance as the ultimate arbiter of perceptual accuracy. Estimating the model with survey data from executives in 196 firms, we find that executives' perceptions are more fact than fiction. While perceptions are not a perfect proxy for hard-to-find objective measures, perceptual accuracy should stimulate greater consideration of executives' perceptions in future IT business value research. © 2007 M.E. Sharpe, Inc.