The effects of IT expenditures on banks’ business performance: using a balanced scorecard approach

Kim, Chang‐Soo; Davidson, Lewis F.

doi:10.1108/03074350410769100

Cited by 41 publications

(33 citation statements)

References 18 publications

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“…The appropriate use of IT applications is not well-comprehended, particularly in areas such as defining what constitutes suitable and beneficial use, and how the use of IT actually shapes varying aspects of business performance (Peppard & Ward, 2004). Though there is an abundance of literature about evaluations of IT investments (see for example Bharadwaj, 2000;Karimi, Somers, & Bhattacherjee, 2007;Kim, 2004), there is a dearth of research that examines how value is actually unlocked by complementary applications. A recent study by Mithas and colleagues (2012) attributed business revenue growth to the capabilities of IT in: (1) delivering novel value propositions; (2) establishing new marketing and sales channels; as well as (3) improving the management of the customer life cycle.…”

Section: Rbvmentioning

confidence: 99%

Resource Complementarity and IT Economies of Scale: Mechanisms and Empirical Evidence

Woudstra

Berghout

Tan

et al. 2017

Information Systems Management

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In this study, we explore economies of scale for IT infrastructure and application services. An indepth appreciation of economies of scale is imperative for an adequate understanding of the impact of IT investments. Our findings indicate that even low IT spending organizations can make a difference by devoting at least 60% of their total IT budget on IT infrastructure in order to foster economies of scale and extract strategic benefits.

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Section: Rbvmentioning

confidence: 99%

Resource Complementarity and IT Economies of Scale: Mechanisms and Empirical Evidence

Woudstra

Berghout

Tan

et al. 2017

Information Systems Management

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“…In order to avoid any interference by other variables, this research includes control variables which are firm characteristics drawn from extant literature. To avoid the impact caused by other variables that are absent from the models used in this research, this study refers to prior research of Kim and Davidson (2004). We investigate the relationship between investment in IT and bank performance by using two equations based on return on assets (ROA) and return on equity (ROE).…”

Section: Analytical Frameworkmentioning

confidence: 99%

“…The Balanced Score Card (BSC) framework is applied to four sets of measures that are designed to capture banks strategies as far as IT investments are concerned. Due to mixed results on IT investments and firm performance, the BSC framework provides a useful framework in measuring the economic consequences of strategic use of IT, because the BSC provides a specification of strategic objectives and appropriate performance measures such as a firm's (1) learning and growth activities (2) internal business processes (3) customer value and (4) financial performance (Kim and Davidson, 2004).…”

Section: Conceptual Frameworkmentioning

confidence: 99%

“…The conceptual framework employed in the study is the Balanced Score Card (BSC) approach (Kaplan and Norton, 1992) and (Kim and Davidson, 2004) to measure the effects of IT investments on banks' business performance. The Balanced Score Card (BSC) framework is applied to four sets of measures that are designed to capture banks strategies as far as IT investments are concerned.…”

Section: Conceptual Frameworkmentioning

confidence: 99%

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Investments in Information Technology (IT) and Bank Business Performance in Ghana

Leckey¹,

Osei²,

Harvey³

2011

IJEF

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This study seeks to ascertain and document the extent to which investment in IT by banks in Ghana can impact on their profitability using the Balanced Scorecard (BSC) framework. The study uses the extensive panel dataset of 15 banks sampled from the Ghanaian banking industry over a 10-year period (1998)(1999)(2000)(2001)(2002)(2003)(2004)(2005)(2006)(2007). The study finds that banks which maintain high levels of investments in IT increased return on assets (ROA) and return on equity (ROE). Keywords: Balanced Scorecard, IT, ROA, ROE, Performance, Banks, Ghana 1. Introduction According to Levitt (1992), technology presents itself as a powerful force that drives the world towards a converging commonality. From the beginning of human era, technology has been one of the most essential and most important factors for the development of mankind (Coombs et al., 1987). Innovations in information processing, telecommunications, and related technologies -known collectively as "Information Technology" (IT) or sometimes Information Communication Technologies (ICTs) -is defined by Ige (1995) as the modern handling of information by electronic means, which involves its access, storage, processing, transportation or transfer and delivery. Langdon and Langdon, (2006) also define IT as a set of interrelated components that collect (or remove), process, store and distribute information to support decision making, co-ordination and control. IT also helps managers and workers to analyse problems, visualize complex subjects and create new products. IT including computer based information systems used by an organisation and their underlying technologies have propelled changes in the banking sector (Langdon and Langdon, 2006). Technological innovation for that matter affects not just banking and financial services, but also the direction of an economy and its capacity for continual and sustainable growth. Most banking industry and development analysts assert that technological change is one of the important factors underlying the dynamics in the banking industry structure and performance today which leads to cost competitiveness and diversification into new lines of business to improve profitability, through strategic positioning and processes. In order to either sustain or enhance on their competitive advantage in an ostensibly growing industry, banking institutions invest fortune or substantial amounts in IT resources, which could also reveal new means of creating value for both the bank and the customer. However, expenditures that affect banks' ability to compete are usually discretionary. These expenditures are made to sustain or increase shareholder value through (1) a revenue growth strategy by expanding into new markets, new customers, products and services and (2) a productivity strategy whereby improvements are made in the cost structure and in asset utilization. Technology is being increasingly employed in service organisations to enhance customer service quality and delivery, reduce costs, and standardise core servic...

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“…The BSC is also utilized as a framework to develop evaluation indicators for organization performance (Davis & Albright, 2004;Kim & Davidson, 2004;Kuo & Chen, 2008). Although BSC makes performance evaluation multidimensional, instead of focusing solely on financial criteria, items such as the massive amount of information needed and bias judgments make performance evaluation process complicated (Chan, 2006).…”

Section: Problem Statementmentioning

confidence: 99%

Performance evaluation and ranking of direct sales stores using BSC approach and fuzzy multiple attribute decision-making methods

Dizaji¹,

Mazdeh²,

Makui³

2018

10.5267/j.dsl

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In an environment where markets go through a volatile process, and rapid fundamental changes occur due to technological advances, it is important to ensure and maintain a good performance measurement. Organizations, in their performance evaluation, should consider different types of financial and non-financial indicators. In systems like direct sales stores in which decision units have multiple inputs and outputs, all criteria influencing on performance must be combined and examined in a system, simultaneously. The purpose of this study is to evaluate the performance of different products through direct sales of a firm named Shirin Asal with a combination of Balanced Scorecard, fuzzy AHP and TOPSIS so that the weaknesses of subjectivity and selective consideration of evaluators in evaluating the performance indicators are reduced and evaluation integration is provided by considering the contribution of each indicator and each indicator group of balanced scorecard. The research method of this case study is applied. The data collection method is a questionnaire from the previous studies, the use of experts' opinions and the study of documents in the organization. MATLAB and SPSS were used to analyze the data. During this study, the customer and financial perspectives are of the utmost importance to assess the company branches. Among the sub-criteria, the rate of new customer acquisition in the customer dimension and the net income to sales ratio in financial dimension are of the utmost importance.

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The effects of IT expenditures on banks’ business performance: using a balanced scorecard approach

Cited by 41 publications

References 18 publications

Resource Complementarity and IT Economies of Scale: Mechanisms and Empirical Evidence

Resource Complementarity and IT Economies of Scale: Mechanisms and Empirical Evidence

Investments in Information Technology (IT) and Bank Business Performance in Ghana

Performance evaluation and ranking of direct sales stores using BSC approach and fuzzy multiple attribute decision-making methods

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