Modeling the business value of information technology

Modeling and measurement issues have been considered the heart of information technology (IT) productivity paradox problem. By collecting data from seven mortgage ®rms, this research attempts to shed light on the causal relationships and complementarity properties among IT and performance variables. The result is a multi-level business value model that connects the use of IT to a ®rm's pro®t. It is concluded that although there exists a causal relationship between IT and pro®t, this relationship is indirect and complex. Due to the complementary nature of the relationships, such a complexity is not reducible. All complementary factors must be in favorable conditions for a positive return of IT investments.