Performance Measurement in Banking & Software Firm: An Empirical Research

Abstract

This research develops principles for an evaluation criterion of the performance of service firm. The relationship between Information Technology (IT) adoption and the performance of firms is not well characterized. The aim of this research is to provide an analysis on the relationship between IT adoption with its usage and IT performance in Indian banking and software firms. IT performance was measured with the help of three important variables: efficiency, effectiveness, and productivity. Each one of the above has been described with a set of pretested questionnaires that were designed for the respondents from the selected firm. Empirical data was collected in the year 2013. A scientific sampling scheme was implemented using the probability sampling technique. Perceptions of branch managers, staff members and customers were collected using survey methodology. Hypothesized relationships between IT adoption and IT performance are empirically tested using survey data from service firms. The relationships between the two, as tested through correlation analyses, are found to be dependent on the IT usage and IT literacy level. IT performance was found to have a positive correlation with factors such as efficiency, effectiveness as well as profitability of service firm. Tenure of IT adoption and utility of IT contributes much towards increase in performance of firms. The analysis suggested that IT usage has a positive linear relationship with IT performance. Overall, this research highlights the complexity of the relationship between IT adoption and IT performance. This research calls for caution in defending IT as universally efficient solutions, and argues that their productivity is linked to the complementary introduction of organizational and technological innovations. This study is conducted in a specific sector, so the results cannot be generalized.