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Abstract:
This
article considers the possibility of a link between organisational
performance and information technology (IT) investment intensity in SME
organisations practising e-Commerce for the period 2001/2002. An
extensive literature review is done and most authors (e.g. Lubbe and
Pather (2002); Kearns (2004) and Moodley (2003)) agree that the
investment in IT also impacts on e-Commerce. The research questions were
identified (e.g. correlation between computerisation index and
profitability; IT investment and profitability; and link between
strategic investment and IT investment). Data was collected with the
help of a questionnaire and some financial statements to answer these
questions.
The answers to the research
questions note that in top performing organisations; (i) IT costs as
proportions of operating costs were higher; (ii) IT costs as a
proportion of turnover was lower, than in weak performing organisations;
and (iii) that a positive correlation exists between the Computerisation
Index (CI) and the Operating Costs ratio. The investigation also reveals
that Chief Executive Officers (CEO)’s expect additional output while
planning e-Commerce operations and keeping IT budgets constant. Evidence
is presented that company performance is linked to the level of IT
investment intensity in the sample of organisations investigated, even
though more output was expected from the IT department.
The study ends with the
following with the following notes – a strong tendency exists that:
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Organisational performance is correlated
with IT investment intensity.
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IT investments will be correlated to IT and
e-Commerce intensive organisations with their profitability.
Keywords:
Digital Commerce, e-Commerce, Framework, IT Investment. |
