Abstract:

With the increasing global interdependencies and the accelerating pace of change, the use of information technology (IT) has evolved from the automation of work processes to systematic transformation of the fundamental business procedures. IT is believed to enhance the competitiveness of the firm by improving its agility through the support and enablement of dynamic capabilities (Sambamurthy et al. 2003; Wheeler 2002). It is not surprising that investment in IT has become a strategic decision and a significant portion of corporate budgets worldwide. According to the 2000 Gartner IT Spending and Staffing Survey , leading edge adopters of technology spend 11% percent of their revenue on IT. The 2003 Gartner survey predicted that most enterprises would increase their budgets by about 5% in 2004 to support new business models, e-business and the changes in the IT adoption profile within the enterprises.   Consistent with Kobelsky et al. (2002), the research model will be tested with all companies listed in InformationWeek and ComputerWorld Annual IT Budget across six years. With an expectation to provide an operational evaluation metric for IT budgeting and to investigate the general pattern of IT budget determinants, we will employ objective measurement rather than perceptions of managers for operationalization. Multiple sources will be used for data collection. By the conference date, we expect to be able to report the operationalization of the constructs and preliminary results.