Information Technology Expenditure Research Articles

Information Technology Investment Assessment Using Val IT Framework

Organizations must evaluate information technology (IT) expenditures to ensure that IT resources' use contributes value and is in line with their strategic goals. This paper investigates how the Val IT Framework can be used as an efficient tool for managing and evaluating IT investments. Val IT offers a thorough framework for assessing IT initiatives' advantages, disadvantages, and risks and their influence on accomplishing company objectives. We examine how the Val IT Framework may enhance accountability, facilitate IT performance monitoring, and increase transparency in investment decision-making through case studies of multiple businesses. The findings demonstrate that the application of Val IT fosters the advancement of improved IT management techniques and raises knowledge of the worth of IT investments. To attain optimal and sustainable outcomes, IT managers and stakeholders are advised by these findings to utilize a framework-based approach when evaluating investments. However, several challenges remain before the framework can be implemented, including a lack of funding, knowledge about it, and opposition to change. Organizations must, therefore, develop a comprehensive plan. To facilitate change adaptation, this plan should offer incremental implementation, adequate training to enable all stakeholders to better understand Val IT and enough resources to support adoption. These steps can assist businesses in more successfully overcoming their existing challenges. By adopting the right approach, businesses may maximize their IT investments and ensure that every dollar invested contributes significantly to achieving their strategic goals. The Val IT Framework serves as both an assessment tool and a roadmap for better, long-lasting results in IT management when used appropriately. This illustrates how crucial it is to make the investment necessary to implement this framework if the business is to be successful and viable in the long run.

FACTORS INFLUENCING INFORMATION TECHNOLOGY INVESTMENTS IN SOUTH AFRICAN SMALL AND MEDIUM SIZE ENTERPRISES: A CONCEPTUAL STUDY

Small and medium-sized businesses (SMEs) are essential to South Africa's development and economic progress. Information technology (IT) expenditures have become crucial for SMEs to stay competitive in the quickly changing digital market. The purpose of this study is to examine the variables affecting IT investments in South African SMEs. The paper provides a thorough examination of the literature, the technique used, the findings, and a discussion of the implications through a conceptual study. The study's findings were derived from an analysis of 15 of the best and most relevant journal articles out of a total of 200 that were obtained and evaluated through Google Scholar that are related to factors impacting IT investments in South African SMEs. The objective was to aggregate the views of many scholars on the issues affecting IT investments in South African SMEs from their writings. The study's findings indicates that financial constraints, perceived return on investment (ROI), industry-specific factors, technological complexity and skills, perceived risk, outside influences, organisational culture, and leadership are among the factors that affect IT investments in South African SMEs. With regards to the study's findings, it is recommended that SMEs should work to understand and address the factors influencing information technology investments in South Africa so they can make informed IT investment decisions, and policymakers should foster an environment that encourages the uptake of technology and the expansion of this industry.

Personal Taxes and Firm Skill Hiring: Evidence from 27 Million Job Postings

Using big data on U.S. job postings, we show that firms increase skill requirements when hiring workers in states that cut personal income taxes. We trace a significant driver of this effect to companies’ reallocation of skilled job postings across states based on tax differentials. The tax-induced upskilling is observed within occupations and is more pronounced for high-skill positions within firms. It is accompanied and amplified by concurrent increases in information technology expenditures at local-level establishments. In characterizing the mechanism at play, we show that job upskilling is triggered by tax changes affecting middle- and upper middle-class workers. It is pronounced for high-growth firms, for firms in tradable industries, and in urban areas, but it is mitigated among profitable firms. A narrative-based analysis helps us establish causal inferences. This paper was accepted by Victoria Ivashina, finance. Supplemental Material: The data files and online appendix are available at https://doi.org/10.1287/mnsc.2022.01211 .

Information and communication technology expenditures and household transport fuel market participation and consumption in Ghana

Information and communication technology expenditures and household transport fuel market participation and consumption in Ghana

Efficiency Assessment of Transport Manufacturing Firms using a Stochastic Frontier Analysis Approach

This paper aims to analyze the level of technical efficiency and determinants of technical inefficiency of transport manufacturing firms in Malaysia using Stochastic Frontier Analysis (SFA) approach from 2005 to 2010. Through SFA approach, hypothesis test is conducted in order to select Cobb-Douglas or Translog production function and testing the effects of technical inefficiencies. While the determining factors that been taken into account include the capital-labor ratio, training expenses, education level ratio, wage rate, information and communication technology expenditure, and firm size. Hypothesis test results show that the Cobb-Douglas production function is rejected. While the test for the effect of technical inefficiency shows its existence. Training expenses, secondary and tertiary education level ratios, wage rates and information and communication technology expenses are significant determinants for transportation manufacturing firms. However, the capital-labor ratio was found that it has reduced the level of technical efficiency. The implications of these results show that firms need to focus on investing in human capital, information technology and increase motivation among employees such as rising wage rates and reducing the use of capital appropriate to the technology.

The speed of change and performance risk: examining the impacts of IT spending in the US hotel industry

研究目的科技创新（TBI）在酒店业提高消费者体验的实践中属于首选方法。了解哪些影响消费者接受酒店TBI的因素至关重要。本论文假设, 除了常用的科技接受模型以外, 消费者对科技的态度会影响到TBI接受度。研究设计/方法/途径本论文开发了一个关于对科技的态度作用于TBI的模型, 并邀请受访者观看在一家行业尖端的连锁酒店中采用无钥匙登记流程的VCR, 然后完成调研问卷。本论文采用科技接纳量表TAP来衡量消费者对科技的态度。研究结果科技态度对酒店订房意图, 作为消费者接受酒店TBI接受度的代表, 有很大的影响。然而, 科技态度只通过信任和好奇感两个中介变量来实现订房意图。研究实践启示研究结果提供有用见解, 鼓励酒店通过介绍TBI服务积极增强消费者对科技的态度。研究原创性/价值大多数研究电子商务接受度的文章往往专注在消费者使用产品或服务的态度变化或者情感倾向。相反, 本论文研究消费者对科技的态度作用于消费者接受酒店TBI服务的态度。本论文证明了对科技的态度显著影响了酒店TBI服务接受度。此外, 本论文还提供实践证明采用TAP量表来研究TBI服务的文章。

An Empirical Investigation of the Relationship between Local Government Budgets, IT Expenditures, and Cyber Losses

Information technology (IT) is the key component of e-government infrastructures, but at the same time, it makes governments more exposed to the cyber risk. In this study, we take an empirical approach to investigate the cyber risk in the public sector. We describe the most common cyber threats facing local governments and build linear models to explain the relationships between cyber losses, local government budgets, and IT expenditures. We find that local governments are affected by cyber incidents more frequently, and disruption incidents that lead to the malfunction of e-government services are on the rise. In addition, the magnitude of cyber losses used to have a strong positive relationship with the affected governments' budget size. However, in recent years, this relationship is weakening, and small local governments are more heavily impacted by cyber incidents than before. Our findings further suggest that investing in information technology is becoming more effective in terms of lowering the loss-to-budget ratio. However, this also means local governments with small budgets do not benefit from this change as much as the large ones do.

The Role of Banks' Technology Adoption in Credit Markets during the Pandemic

This paper shows that higher information technology (IT) adoption by banks led to a larger increase in corporate lending in the months following the COVID-19 outbreak in Italy. Examining banks with heterogeneous degrees of IT adoption, we investigate the dynamics of credit and its allocation across firms using a new database with detailed information on bank IT expenditures and propensity to innovate matched with bank-firm level data on credit growth before and during the pandemic. Using a difference-in-differences identification strategy, we find that banks with higher intensity of IT adoption increased their credit more than others during the pandemic. The increase was concentrated in term loans extended to smaller and financially sounder companies; the effect was stronger in the initial phase of tighter restrictions to firm activity and individual mobility, and more significant for undertakings active in the sectors most affected by the shock. We provide evidence that these results are driven by both bank's ability to offer credit entirely on-line and bank's use of digital technologies for creditworthiness assessment. We find that physical proximity between borrowers and lenders remained important for credit provision during the pandemic, but only when combined with high level of IT adoption.

Do information technology (IT) capabilities affect hotel competitiveness?

Purpose This paper aims to examine the impacts of IT capabilities on hotel competitiveness. Design/methodology/approach This study adapts and extends Hua et al. (2015) and O’Neill et al. (2008) by incorporating the specific measures of IT expenditures as proxies for the relevant IT capabilities to explore the impacts of IT capabilities on hotel competitiveness. Findings This study finds that expenditures on IT Labor, IT Systems and IT Websites exert different impacts on hotel competitiveness. In addition, IT capabilities exert both contemporary and lagged effects on hotel competitiveness. Originality/value This study is the first that uses financial data to capture direct measures of individual IT capabilities and tests the individual impacts of IT capabilities on hotel competitiveness from both contemporaneous and lagged perspectives. It uses a large same store sample of hotels in the USA from 2011 to 2017; as a result, the study results can be reasonably representative of the hotel population in the USA.

The moderating effect of operator type: the impact of information technology (IT) expenditures on hotels’ operating performance

PurposeThis study aims to examine how operator type moderates the relationship between hotel information technology (IT) expenditures and operating performance.Design/methodology/approachBy adapting and extending O’Neill et al.’s (2008) and Hua et al.’s (2015) research, this study constructed an empirical model and tested proposed hypotheses, with Newey and West (1994) errors computed to accommodate potential heteroscedasticity and autocorrelation issues.FindingsOperator type moderates the impact of hotel IT expenditures on operating performance. In particular, it appears that the operator type of franchising exerts a stronger moderating effect compared with other operator types explored.Practical implicationsThis study, as the first of its kind, shows that the choice of operator type shapes how a hotel can effectively use IT expenditures to improve operating performance. This finding can be beneficial for hotel owners when making operator type decisions. In addition, operator type moderates the direct impact of IT expenditures on revenues and gross operating income. This study’s results show that franchised hotels seem to use IT expenditures more effectively compared with independently owned hotels.Originality/valueThis study contributes both theoretically and practically to understand how operator type moderates the relationship between IT expenditures and hotel performance. The research outcome provides a more holistic view that governs the relationships between IT expenditures, operator type and operating performance.

Strategic Alignment of Information Technology in Public and Private Organizations in India: A Comparative Study

Strategic alignment of information technology (IT) is required to be included in the firms’ core activity in today’s business environment. The purpose of this study is to understand the impact of ‘IT connectivity, IT infrastructure and IT human resources’ on ‘IT business strategic alignment’ by developing a model, in public and private organizations in India. A questionnaire was used to measure the constructs after its validity and reliability. The findings discovered that firms’ IT strategic alignment was significantly impacted by three IT dimensions, that is, IT connectivity, IT infrastructure and IT human resources (combined as IT capability). The IT investments and expenditures of a firm are aligned with its business objectives and priorities. Furthermore, the significant role of these dimensions in public and private organizations in India was examined.

Impact of E-Commerce Sales on Profitability and Revenue. The Case of the Manufacturing Industry

E-commerce has grown significantly in recent years. Although the factors that contribute to the implementation of e-commerce have been studied in prior literature, little has been done about the impact that the introduction of e-commerce has on both profitability and revenue. This is important because, as Solow (1987) points out, the information technology expenditures do not always allow firms to achieve a better performance. For this purpose, the authors use the data from the Spanish Survey on Business Strategies (ESEE). The research covers an eight-year period (2008-2015). 2,544 Spanish companies belonging to the manufacturing sector were analysed. Results show that neither business-to-business (B2B) nor business-to-consumers (B2C) e-commerce seem to have influence on the revenue growth. Therefore, a substitution effect may exist between the sales by physical channels and e-commerce sales. However, the authors have found evidence that companies which adopt a high level of e-commerce (B2C and B2C simultaneously) immediately experience increase in their profitability. Moreover, if firms adopt only B2B or B2C the positive effects on profitability are achieved in the year subsequent to that of the measurement of the e-commerce status.

Addressing the incremental risks associated with adopting Bring Your Own Device

Bring Your Own Device (BYOD) involves allowing employees to use their own mobile devices to access their organisations’ networks. Many organisations are embracing this trend as a means to cut information technology (IT) expenditure, enhance employee satisfaction, etc. However, these and other benefits come at a cost in the form of exposing an organisation to new risks. The aim of this research was to assist organisations to identify the incremental risks they could potentially encounter if they implement a BYOD programme and how they can reduce the risks directly related to BYOD to an acceptable level. An extensive literature review was performed to identify the risks which arise as a result of the adoption of a BYOD programme. COBIT 5 was identified as the most appropriate framework which could be used to develop possible safeguards to mitigate the incremental risks associated with a BYOD programme to an acceptable level. Safeguards were developed to address the risks.

Mapping IT Spending Across Industry Classifications: An Open Source Dataset

The primary objective of this study is to compile a data set of industry level IT spending based on publicly available information and make it available as an open source. Information technology (IT) spending is one of the most significant capital expenditures for most firms but companies are not required to report the amount of their IT expenditures. The only publicly available information comes from survey results such as InformationWeek (IW500). The publicly available IW500 reports provide information about IT spending on an industry basis rather than information about spending by individual companies. A problem with the survey results is that the industries do not conform with commonly used industry classification systems such as SIC or NAICS. In this paper we develop a method to map the IT spending information provided by IW500 to the SIC, NAICS, GICS, and Fama-French industry classifications so that the spending information will be available to researchers and practitioners in a more useful format. The IT spending information sorted by IW500 industries is presented and characteristics examined. A model is developed to map the data from IW500 industries into the commonly used industry classification systems and access to a sample of these data is provided.

Determinants of government efficiency: does information technology play a role?

This paper tries to analyze the effects of information technology on the government efficiency. The study is done by using system GMM from data of 51 countries during 2003 until 2010. The results show that efficiency of government positively responds to changes in information technology expenditure whether in the government and in the total society. The findings also imply that transparency and control corruption has positive effect on efficiency of government. Furthermore, government expenditure delivers negative effect on government efficiency. The study also finds that CPI as a proxy for inflation increases significantly the efficiency of government.

Firm Size and Information Technology Investment Appraisal: Evidence from Commercial Banks in Kenya

Information technology expenditure in banks consumes an ever increasing portion of operating costs and revenues. As organisations continue increasing their investment in IS, the process of evaluating potential Information Technology (IT) investments becomes an important activity for an organisation‟s management. This study attempts to establish whether the choice of IT investment appraisal approaches is associated with the size of a firm using evidence from commercial banking institutions in Kenya. Results of the survey show that there is a correlation between choice of approach and firm size. Among the banking institutions in Kenya, medium-sized banks focus the most on both the strategic and analytical approaches to IT investment appraisal. Majority of small banks have adopted relatively simple economic techniques such as payback period and cost-benefit analysis, and they do not focus on the more sophisticated analytical and integrated approaches as much as the medium-sized and large banks. Finally, large banks have adopted all of the appraisal approaches explored in this study. The results of this study help to establish banking industry-wide benchmarks and best practices in IT investment evaluation, thereby assisting IT executives to make more informed decisions for future investments.

Texas hospitals with higher health information technology expenditures have higher revenue: A longitudinal data analysis using a generalized estimating equation model.

BackgroundThe benefits of health information technology (IT) adoption have been reported in the literature, but whether health IT investment increases revenue generation remains an important research question.MethodsTexas hospital data obtained from the American Hospital Association (AHA) for 2007–2010 were used to investigate the association of health IT expenses and hospital revenue. The generalized estimation equation (GEE) with an independent error component was used to model the data controlling for cluster error within hospitals.ResultsWe found that health IT expenses were significantly and positively associated with hospital revenue. Our model predicted that a 100 % increase in health IT expenditure would result in an 8 % increase in total revenue. The effect of health IT was more associated with gross outpatient revenue than gross inpatient revenue.ConclusionIncreased health IT expenses were associated with greater hospital revenue. Future research needs to confirm our findings with a national sample of hospitals.

Factors Affecting Health Information Technology Expenditure in California Hospitals

This paper investigates the factors affecting health information technology (IT) investment. Different from previous studies, health IT was measured as the dollar amount of hardware, software and labor related health IT. This study employed Hospital and Patient level data of the Office of Statewide Health Planning and Development (OSHPD) from 2000 to 2006. The generalized linear model (GLM) was employed with log link and normal distribution and controlled for clustering error. This study found that not-for-profit and government hospital, teaching hospitals, competition, health IT expenditure of neighborhood hospitals were positively associated with health IT expenditure. However, rural hospitals were negatively associated with health IT expenditure. Moreover, this study found a significant increase in health IT investment over seven years resulted from increased clinical IT adoption.

Determinants of Information Technology Expenditure: A Contingent Model

In this article, we propose and test a model to explain the determinants of an organization’s IT budget. The research model extends prior research by providing a strong theoretical underpinning for the driving forces of IT budget, incorporating both dynamic and static contingencies internal to the organization, as well as from the external environment. We find that these contingencies are positively related to the IT budget decision. Our findings also demonstrate a moderating, as well as direct effect of the industry strategic role of IT, contributing to previous research, which identifies only a direct effect. Drawing on a comprehensive database and using objective measures for our research, we aim to provide a reference metric for an organization’s IT budget decision

On governance structures for the cloud computing services and assessing their effectiveness

This research suggests information technology (IT) governance structures to manage the cloud computing services. The interest in acquiring IT resources as a utility from the cloud computing environment is gaining momentum. The cloud computing services present organizations with opportunities to manage their IT expenditure on an ongoing basis, and access to modern IT resources to innovate and manage their continuity. However, the cloud computing services are no silver bullet. Organizations would need to have appropriate governance structures and policies in place to manage the cloud computing services. The subsequent decisions from these governance structures will ensure the effective management of the cloud computing services. This management will facilitate a better fit of the cloud computing services into organizations' existing processes to achieve the business (process-level) and the financial (firm-level) objectives. Using a triangulation approach, we suggest four governance structures for managing the cloud computing services. These structures are a chief cloud officer, a cloud management committee, a cloud service facilitation centre, and a cloud relationship centre. We also propose that these governance structures would relate directly to organizations' cloud computing services-related business objectives, and indirectly to cloud computing services-related financial objectives. Perceptive field survey data from actual and prospective cloud computing service adopters suggest that the suggested governance structures would contribute directly to cloud computing-related business objectives and indirectly to cloud computing-related financial objectives.