THE VALUE OF INFORMATION TECHNOLOGY: A RESOURCE VIEW

Publication Year:
1991
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Repository URL:
https://aisel.aisnet.org/icis1991/4
Author(s):
McKeen, J. D.; Smith, H. A.
article description
Based on an examination of the role of information technology (IT) within organizations, this paper outlines a new approach to the assessment of IT referred to as the resource view. This approach suggests that labor and IT should be considered jointly in the overall resource equation and that the application of IT should be treated as a resource deployment issue. Using this approach, it is possible to assess the value of IT in terms of its enhancement of a known resource -labor. The efficacy of the resource view of IT was tested using data from a sample of seventy-one companies. For each company, business revenue (a measure of the volume of business activity) was plotted over time against actual labor and also against a measure of labor and IT combined. It was found that the combined resources of labor plus IT tracked business revenue much closer than labor alone, providing evidence to support the resource view of IT. It is felt that resource analysis may be a promising method for understanding the role of IT and assessing its ultimate value to organizations.