Organizations are increasingly reliant on information technology, such as big data or analytics – yet they’re not always satisfied with the results. So, how can companies better leverage IT for improved organizational performance?
To explore this further, University of Ottawa’s Telfer School of Management partnered with CMC-Canada this year to generate insights on whether consultants are making the most of their IT investments. CMC-Canada members were asked to participate in an online survey to examine the relationship, if any, between IT competency and organizational performance.
Survey Results Highlights
While there are examples of organizations that are successful in adopting advanced technologies (like big data and analytics) there are also many examples of organizations that have been unsuccessful. Over large scales, successes and failures tend to cancel each other out suggesting technology alone isn’t enough. Our survey showed this to be the case where the measured relationship between IT and organizational performance is practically zero.
The survey results support the general notion that it is not enough to simply possess technology; organizations must also know how to use it. Questions any organization should ask before employing technology should include: ‘what is the value of a technology if we do not know how to use it properly?’ and, conversely, ‘what are the potential consequences of using technology even if we do not know how to use it properly?’ But where does this knowledge come from? Each organization will leverage technology differently, and the know-how to employ it will be as unique as each organization. Given any level of uniqueness, the required knowledge cannot all come from outside the organization, some must be developed within.
Organizational learning (OL) is the ability to acquire, understand, share, and utilize organizational knowledge – and it's been proposed as the means for organizations to develop their own unique knowledge necessary to capture the value that technologies afford. We tested this notion and found that greater IT capabilities did indeed lead to better organizational performance in the presence of OL. Furthermore, the higher an organization’s OL capabilities, the more performance they demonstrated. Not only this, but we also found the components of OL that focus on learning outcomes to be of highest benefit. These components include: clarity of purpose and mission, shared leadership and involvement, experimentation, transfer of knowledge, and teamwork and group problem solving. Organizations that scored highly on all these aspects of learning showed the strongest connection between their IT capabilities and realized organizational performance.
To learn more about the study and results, click here for the full report.
The researchers involved in this survey would like to thank CMC-Canada and all of its members for participating in this survey. We hope that the results obtained will be helpful to advance the understanding in making the most of IT investments for management consultants and researchers alike.
MSc in Management
Telfer School of Management at the University of Ottawa