Assessing the Organizational Impact of IT Infrastructure Capabilities By

It has been strongly argued that information technology (IT) infrastructure has a strategic impact on an organization. However, no empirical examination of this relationship has been performed. In this paper, based on a survey of 236 firms, the organizational impact of IT infrastructure is assessed using a research model incorporating both direct and indirect impacts. Our results show that, although there was little direct impact, IT infrastructure had a significant indirect effect on organizational performance through its impacts on IS functional effectiveness and business process effectiveness. The results suggest that, in and of themselves, IT infrastructure capabilities have little business value. Investments in IT infrastructure will be seriously undervalued if they are assessed only in terms of its direct link to organizational performance. IT infrastructure is of strategic importance to an organization because it either enables or inhibits IT applications and business processes. It is the manner in which IT infrastructure investments are applied to enhancing IS functional performance and to improving business processes that is key to realizing their business value.