Data envelopment analysis of IT-enabled strategy for construction organisations

Abstract

The strategic impacts of Information Technology (IT) on the organisations' performance have been of interest to both managers and researchers for decades. This is partly because despite the massive investments in IT the findings on its contribution to organisation performance were inconsistent. Attempts to explain the reasons for the equivocal results were attributed to difficulties in modelling, choice and operationalisation of variables, data measurement and analysis and focus on an aggregate organisation level of analysis thereby ignoring the intermediate processes through which IT impacts on organisation performance. Furthermore, most of the previous studies were imprecise, theoretically unstructured and are not directly applicable to the construction industry. To mitigate some of these drawbacks a conceptual model for measuring IT business value in construction organisation is proposed. The model adopts three paradigms of process-based view, microeconomics-based view, and resource-based view as the theoretical framework to model the relationship between IT and firm performance. Using economic based view we derived a production function using a non parametric technique of Data Envelopment Analysis (DEA) to test the model empirically. The result could be used to benchmark and establish the relative competitive advantages of the construction organisations and provide support to managers in decision making on IT investments.