Rationalization of Productivity of Information Technology through Business Value

Tarun Kumar Singhal, Smrita Sinha, Anubha Vashisht

Vol 17 , Issue 1 , January - June 2016 | Pages: 55-64 | Research Paper

https://doi.org/10.51768/dbr.v17i1.171201615

Published Online: January 04, 2016

Author Details ( * ) denotes Corresponding author

1. * Tarun Kumar Singhal, Professor, Symbiosis Institute of Telecom Management, Constituent of Symbiosis International University, Pune, Maharashtra, India (dr.tarun@rediffmail.com)

2. Smrita Sinha, Assistant Professor, Amity Business School, Amity University, Noida, Uttar Pradesh, India

3. Anubha Vashisht, Assistant Professor, Symbiosis Center for Management Studies, Constituent of Symbiosis International University, Noida, Uttar Pradesh, India

Purpose: To ascertain impact of IT in creation of employee value, customer value, shareholder value, and managerial value as a part of business value which in turn increases the overall productivity

and profitability in organizations.

Design/Methodology/Approach: The primary data used in the following research have been collected from over 200 Indian organizations through Ministry of Statistics and Program Implementation. While the managerial and shareholder value data were calculated, the employee satisfaction and customer value data was originally collected as a part of surveying program by the Ministry with questionnaires having appropriate level of acceptance for empirical analysis. For the analysis, simple linear model is used based on the linear regression relation in each of the four hypotheses.

Linear regression is an approach to the linear model which aims in establishing relation between scalar dependent variable (namely Y) with an independent variable X. As only one independent variable is present, linear regression is being used instead of unified multiple regressions. Linear regression equation is given by y = ax+c where y is the measured variable or regress, and c is numeric constant. For classification of data and tests of correlation, mean, mode, variance and standard deviation of the datasets has been found.

Findings: The present empirical analysis supports the previous researches and propositions that IT generates customer satisfaction as well as investment or shareholder value. However, it contradicts the productivity paradox which stated that employee satisfaction has decreased by significant levels after the implementation of IT.

Research Limitations/Implications: Thus, according to our empirical research and analysis, implementation of IT with an aim to attract investment and produce quality products while maintaining employee goodwill generates huge business value, and increases the productivity of the organization. Thus, business value should be considered as a crucial determinant of productivity through IT.

Practical Implications: The correct implementation and intelligent application of the available IT resources can surely revolutionize the technology based world in this globalization era. However, the key factors always need to be taken under consideration so that, the development takes place in the right direction. Business value generation with IT aims to achieve sustainable development of the organization along with its employees, shareholders and customers.

Originality/Value: The paper provides evidence of contribution of IT in generation of business value. The research has included key performance indicators such as employee value, customer value, shareholder value and managerial value as a part of business value for the purpose of determining whether or not they are influenced by IT. It also provides important insights to the decision makers to visualize IT in the appropriate dimensions of overall productivity.

Keywords

Information Technology, Business Value, Productivity, Customer Value, Employee Value.

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