Modeling the business value of information technology

Modeling and measurement issues have been considered the heart of information technology (IT) productivity paradox problem. By collecting data from seven mortgage firms, this research attempts to shed light on the causal relationships and complementarity properties among IT and performance variables. The result is a multi-level business value model that connects the use of IT to a firm’s profit. It is concluded that although there exists a causal relationship between IT and profit, this relationship is indirect and complex. Due to the complementary nature of the relationships, such a complexity is not reducible. All complementary factors must be in favorable conditions for a positive return of IT investments.