Seabelo Mathswenyego, Rembrandt Klopper and Sam Lubbe
improved organisational performance in terms of return on investments, turnover growth and net profit. In order to achieve positive results with improved ICT investment, the SAPO management might need to consider investing in technologies or ICT systems that fit their business environment and hence support the broad strategic objectives of the organisation. This will presumably assist in driving the organisation’ s growth.
6.3 What is the impact of ICT investment on organisational risk, cost‐benefit analysis, operating leverage, and return on IT assets?
Loukis et al.( 2009) argue that the relationship between ICT and business should lead to ICT investments adding strategic value to the business. ICT effectiveness is thus measured in terms of the value that it adds to the business value proposition.
6.4 What is the impact of ICT investment on the financial performance of the SAPO, as measured by ROI, operational costs, profitability levels( operating income, operating leverage, net profit, and turnover growth) and operating expenses?
Lee and Lee( 2010) note that business executives must no longer use financial benefits alone to measure the value added by ICT investments. Instead, they now consider non‐financial benefits such as the IT costefficiency ratio, IT efficiency ratio, improved customer satisfaction, better information availability and shorter production cycle times.
7. Managerial guidelines
From the results of this study, the following guidelines are recommended for the SAPO management:
• Consider the re‐engineering of the organisation’ s processes, in order to align them with the operation of new ICT technologies and achieve a return on investments.
• Contemplate the alignment of the IT strategy with the overall SAPO business strategy.
• Consider procuring ICT technologies that support the organisation’ s strategic objectives, in order to drive the organisation’ s growth.
• Ensure that available technologies are fully utilised, in order to realise their value and grow the business.
• Consider employing competent ICT personnel with experience.
• The SAPO might be in need of competent managers who can convert original ideas into effective applications, so that ICT investment can have meaningful results that benefit the organisation.
• The SAPO also needs to do a value chain analysis to assist in ensuring that ICT initiatives are tightly coupled with the business activities, thereby resulting in good business performance.
8. Conclusion
Based on the quantitative data obtained from the SAPO for the period 2005 to 2010, it can be concluded that ICT investment during this period was negatively correlated with most of the financial indicators, such as return on ICT investment, operating leverage, turnover growth, net profit, organisational risk and IT efficiency ratio. However, ICT investment correlated positively with the IT cost‐efficiency ratio and operating expense ratio.
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