A Quantitative Assessment of the Relationship between Information Systems Investment, Information Systems Strategy, and Project Performance

Effective implementation of information systems (IS) remains subject to several contributory factors that have both positive and negative influences. Analyzing these factors can help create predictors that would help managers while choosing the right IS projects and during capital budgeting exercises. This study focused on two main factors, IS project investment and IS project strategy, to determine their significance and relationship with IS project quality, IS project financial performance (net present value [NPV], internal rate of return [IRR], and payback period [PP]), and net benefits. A quantitative research design adopting a multivariate multiple regression analysis was used for exploring the relationships between the study variables. Data analysis from 399 IS projects from a single organization, a mortgage insurance company, with inferential statistics helped to test the hypotheses. This study found a relationship between IS project investment, IS project strategy, and IS project quality, though with a weak predictive value. No relationship between IS project investment, IS project strategy, and IS project financial performance was observed; however, NPV and IRR had a strong negative relationship and a medium positive relationship with IS project investment, respectively. This study also found a strong relationship between IS project investment, IS project strategy, and net benefits. The results of this study provide more predictive measures for the development and evaluation of IS projects based on IS investment and IS strategy as the main factors