Perceived Strategic Value of Information Systems: Measurement, Determinants, and Effects

Busch et al. (1991) report Lhal the Chief Executive Officer's (CEO) perception of Information Technology (IT) importance had the strongest effect on the progressive use of IT in the firm. They advocate additional research on the perceptions of the CEO and other top management of the value of IT. The perceptions of top management on the strategic value of infonnation systems (PSVIS) are classified into three typesbased on a review of the strategic use of information systems literature. The first type is the perception of a support rolefor information systems (PSVISSUP). This role is supported in the work of Porter and Millar (1985), Kim and Michelman(1990), and other frameworks based on Porter's (1980) work. The second is the perception of information systems asmanagerial productivity enhancement tools (PSVISPRO). The evidence for this role is seen from the fact that data sharingand communication across departments and the high penetration and use of office automation and communicationtechnology were expressed as needs by CEOs from information technology departments (Moynihan 1990). The third typeis the perception of information systems as strategic decision aid tools (PS VISSTR). An example of this role would be theuse of Group Decision Support Systems(GDSS) in supporting competitive analysis as illustrated in Dennis, Nunamaker, auidParanka (1991). Inter-organizational information systems (Johnston and Vitale 1988) are incorporated in the supportperception as linkages to suppliers and in the strategic decision aid perception as cooperative partnerships.Responses for the items iii the PSVIS instrument froin a s:unple of seventy one senior level managers were used inmeasuring PSVIS. Subsequent factor analysis empirically confirms the presence of these types of PSVIS. The reliabilityof the instrument was obtained using the alpha reliability coefficient from the analysis of variance results (Kerlinger 1986,pp. 409412). The validity of this instrument was obtained using the communality measure from the factor analysis of theseitems (Kerlinger 1986, pp. 428-431). The reliability measure for this instrument is 0.96363 and the validity measure is0.89806. Both of these values are high and would indicate higher confidence in using the PSVIS instrument. REFERENCESBusch. E. A.: Jarvenpaa, S. L.; Tractinsky, N.; and Glick, W. H. "External versus Internal Perspectives in Determining aFinn's Progressive Use of Information Technology." In J. 1. DeGross. 1. Benbasat, G. DeSanctis, and C. M. Beath(Editors), Proceedings of the Twel/?h international Conference on Information Systems. New York, 1991, pp. 239-250.Dennis, A. R.; Nunamaker, J. F.; and Paranka, D. "Supporting the Search for Competitive Advantage," Journal ofManagement 1*rmation Systems,Volume 8, Number 1, Summer 1991, pp. 5-36. Johnston, H. R., and Vitale, M. R. "Creating Competitive Advantage with Interorganizational Information Systems," M/SQuarterly, February 1988. pp. 153-165.Kerlinger, F. N. Foundations of Behavioral Research. Fort Worth, Texas: ]lott, Rinehart, and Winston, 1986.