IT valuation in turbulent times

This paper investigates performance impacts of two types of IT value practices – efficiency and knowledge management (KM) – by taking two external environmental factors – dynamism and hostility – into account. A survey of IT managers was conducted to assess the environmental conditions under which one mode of value practice or the other becomes more salient. Results suggest that despite the apparent value of knowledge management in the new economy, IT managers continue to emphasize the traditional orientation of efficiency. This tendency persists in highly dynamic and hostile industrial environments. Interestingly, however, when these environmental factors are controlled for, KM-based IT valuation clearly pays off for firm performance.