Investigation the Effect of Investment in Information Technology on Organization Productivity

Investments in information technology (IT) have grown continuously over the past 30 years. Recently, IT has become the largest item of capital expenditure in most organizations. While organizations have invested in IT as a means to improve organizational performance, many previous researches have failed to show any evidence of the IT impact on organizational productivity. This "IT productivity paradox" has been a debated issue since the mid-1980s while recent firm level studies have claimed that the IT productivity paradox no longer exists. According to these studies, information technology alone will not necessarily improve organizational performance. Improved processes and organizational performance is a result of the right information technology applied within the right business process. Thus, this research investigated the impact of IT on productivity of organizations with variables such as "decentralized decision making" and "improved business processes". The primary data collected from manufacturing and services firms of East-Azerbaijan questionnaire. The results of this study indicated the positive effect of information technology (IT) as an effective variable on "decentralized decision making" and "improved business processes" that leads to high productivity of organizations.