Beyond the IT productivity paradox

Despite the massive investments in Information Technology in the developed economies, the IT impact on productivity and business performance continues to be questioned. The paper critically reviews this IT productivity paradox debate and finds that an important part, but by no means all, of the uncertainty about the IT payoff relates to weaknesses in measurement and evaluation practice. Based on extensive research by the authors and others, an integrated systems lifecycle approach is put forward as a long term way of improving evaluation practice in work organizations. The approach shows how to link business and IT/IS strategies with prioritizing investments in IT, and by setting up a set of interlinking measures, how IT costs and benefits may be evaluated and managed across the systems lifecycle, including consideration of potential uses of the external IT services market. An emphasis on a cultural change in evaluation from 'control through numbers' to a focus on quality improvement offers one of the better routes out of the productivity paradox. Improved evaluation practice serves to demystify the paradox, but also links with and helps to stimulate improved planning for management and use of IT, thus also reducing the paradox in practical terms - through the creation of greater business value.