Information Technology Investment and Firm Performance in Developing Economies: The Relationship Between Management Practices and Performance

Abstract

Over the last two decades, organizations In Namibia and Zambia have been increasingly investing in information technology (IT) largely due to prospects of IT enabled organisational performance improvements. However, despite these assumptions, insufficient validations have been done in the context of these two countries due to limited local research on this topic. The aim of this study is to investigate the performance of local IT investments and the determinants of value creation. A basic premise of this paper is that IT enabled firm performance is influenced by how effective the firm is in using IT resources to support and enhance its core competencies. In accordance with literature the findings indicate that firms in the two countries consider IT investments as vital for superior firm performance. However, IT management practices employed are considerably different from the recommended best practices of IT governance, nevertheless IT investments still performed significantly well partly due to prevalent use of off-the-shelf IT solutions and IT investments leadership and championship by IT and/or line managers. There are also issues with effectiveness of IT deployment and Information system and information quality.