An analysis of the impact of information technology on the performance of *construction contracting firms
Abstract
The impact of IT investment remains poorly understood with respect to the construction industry. IT investment in construction firms continues to increase annually, but many construction firms have few adequate tools to evaluate their IT investment, as well as its benefits relative to expenditures. This study is one of the first full-scale research efforts that identifies the impact of IT on performance at the firm level in the construction industry. Seven years of historical data on IT investment and performance were collected from 33 large construction contracting firms in Korea. The main research questions of this study analyze three relationships: the relationship between IT investment and firm performance, the relationship between the type of IT use and firm performance, and the relationship between firm specific resources related to IT and performance. This research divided IT investment into sub components by using two different categories for analysis: IT investment in specific contexts and IT investment in specific business functions of the construction firms. Following the framework established in the Business Scorecard, firm performance was measured in four different aspects of corporate operations: the financial aspect, internal process aspect, the aspect of customer, and the aspect of innovation and learning. This study investigated the influence of the firms' two internal factors—firms' IT effectiveness and contextual factors—which can affect the relationship between IT investment and performance. This study produced several meaningful findings. While industry executives believe that IT investments have had a positive impact on firm performance, this research found that the effects of IT depend on the type of IT investment, the aspect of firm performance being measured, and specific contextual factors. In general, IT investments were found to have a more significant impact on measures of customer service than financial, internal efficiency, or innovation measures of firm performance. However, IT investment focused on general administration, rather than for specific construction applications, had significant associations with revenue per employee and revenue growth. IT-business strategy alignment, IT training, and benchmarking were found to have moderated the relationship between IT investment and firm performance.
Degree
Ph.D.
Advisors
Skibniewski, Purdue University.
Subject Area
Civil engineering
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