Seabelo Mathswenyego, Rembrandt Klopper and Sam Lubbe
wide universal postal service at an affordable cost. To this end, it establishes rules for access to universal postal services and the quality of these services( SAPO, 2010).
2. Literature review
2.1 Impact of ICT on an organisation
ICT strategies, according to Huang et al.( 2008), include the technology scope, system competencies and ICT governance. The technology scope focuses on important ICT technologies and applications, while system competencies deal with those capabilities that distinguish ICT services and are important to the achievement of a company‘ s strategies. ICT governance, among other things, involves the areas of responsibility in a partnership between ICT and business.
Measures of performance guide the creation of ICT strategic plans, which are then converted into operational plans. It is critical that a framework be established for ICT management reporting, and ICT performance in key business areas should be communicated and motivated. Hu and Quan( 2005) state that ICT has provided competitive advantages to firms by adding value across all aspects of the value chain, improving operational performance, reducing costs, increasing decision quality and enhancing service innovation and differentiation. The introduction of ICT in organisations has had mixed results in terms of productivity output.
2.2 The history of the effectiveness of ICT in terms of organisational performance
Various approaches were used by researchers such as Kwong and Mohammed( 1985) and Ward( 1987) to measure the benefits of ICT for an organisation. Ward( 1987) claims that contrary to common policy, expenses such as research should be included as part of the total ICT investment cost. Kwong and Mohammed( 1985) suggest the use of a computerisation index( CI) in their empirical study on the quantitative evaluation of the impact of computerisation on profitability. CI, they claim, measures the extent and sophistication of computerisation.
Kwong and Mohammed( 1985) compare the methods of Product Portfolio and Profit Impact of Marketing Strategy( PIMS) and the Boston Consulting Group Method as measurements of financial performance. In contrast to Harris and Katz( 1991), the conclusion is that the ROI is a suitable measure of financial performance, in spite of its deficiencies in dealing with the timing, duration and risk differences among returns.
Weill and Olson( 1989) indicate that the link between ICT and corporate strategy varies a lot. Claims which emerge from their study include the suggestion that managers need to adopt a broad definition of ICT so that they know what that investment is, and that ICT expenditure should be measured and tracked over time against a convenient base. This suggests that the amount of every ICT investment could be treated as a portfolio investment, with different aims and associated levels of risk.
2.3 Business performance
Relationships between investment in ICT and business performance, as well as productivity, have reported the positive effects of such investment. Lin( 2009) questions these results on the grounds that the studies involved an examination of primarily cross‐sectional data. This criticism stems at least in part from the premise that the benefits of ICT investment can only be realised over longer periods of time. Research reflecting relationships between ICT investment and business performance and productivity might be convincing if it were based on ICT investment in both current and previous periods.
On the one hand, there is a shortage of relevant metrics. On the other hand, there is an absence of a proper methodology to evaluate the payoffs of ICT investments( Meyer and Degoulet, 2010). They report that in a survey published in 2004( McKinsey on IT), more than two thirds of CIO’ s reported they had no process in place for auditing the performance of their ICT projects.
Epstein and Rejc( 2005) developed a model for evaluating performance in information technology, in order for management to better justify and evaluate ICT initiatives. The ICT contribution model for evaluating performance in ICT is a general model of key factors that help organisations identify and measure the costs
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