Impact of information technology (it) governance on firm business value: the role of business-it alignment and it investment performance

Abstract

The research examines the impact of IT governance on business-IT alignment and IT investment performance to achieve firm business value. IT investment is a essential part of a system of interrelated firm resources where the level of IT business value depends on the degree of systems fit or misfit. This study drawn on the related literature in IT governance, IT investment performance, business-IT alignment and firm business value. The sample of 34 commercial banks and telecommunication companies in Sri Lanka participated in this study. Accordingly, the findings of this study proved the proposed hypotheses are supported except hypothesis 3. Accordingly, the first hypothesis proved that the IT governance facilitates to create better business - IT alignment. The second hypothesis proved that the IT governance practices create improved IT investment performance for businesses. The fourth hypothesis confirmed that the IT investment performance create firm business value. In contrary to the expectation, the third hypothesis that the business IT alignment and firm business value failed to support. The implications are also suggested from this study finding.