Does successful investment in information technology solve the productivity paradox?

Based on previous empirical research, there seems to be little relation between investment in information technology (IT) and ®nancial performance (often referred to as the `productivity paradox'). We hypothesize that this is due to the fact that many companies implement IT projects ineffectively. Like any other asset, IT must be utilized effectively to result in increased ®nancial performance. By comparing successful users of IT and less successful users of IT, we show that successful users of IT have superior ®nancial performance relative to less successful users of IT. However, any ®nancial performance advantage is short-lived, possibly due to the ability of competitors to copy IT projects. # 2000 Elsevier Science B.V. All rights reserved.