Towards a Theory of Value Latency for IT Investments

Abstract

Multiple studies in the information systems (IS) literature recognize that information technology (IT) investments may not yield immediate returns. Nevertheless, there has been a lack of theoretical and empirical research to understand and explain this value latency phenomenon. We propose a new theoretical perspective on the latency of IT value and argue that IT value flows occur in three phases: the value dormancy phase, the value triggering phase and the value transformation phase. We validate our theory by mapping the prior IT value literature onto its theoretical dimensions. To provide a preliminary validation of this theory, we use it to explain differences in the IT investment value lags experienced by two organizations.