Impact of information technology (IT) investment on productivity in Tanzania business firms

Information Technology (IT) is relatively new, and little is known about the impacts of its use in contemporary organizations. A number of studies have investigated the relationship between investment in IT and an organization's productivity. The findings were inconsistent and partly, even paradoxical. The objective of this study was to find out the impact of IT investment on productivity in Tanzanian business firms. Specifically, the study sought to, firstly, determine criteria of financial gains (measure of objectiveness) from the use of IT. Secondly, to find out whether investment in IT has been beneficial with reference to Tanzanian business undertakings, and lastly, to investigate and recommend the conditions for ensuring increases in productivity, efficiency, effectiveness, transformation and competitiveness through the use of IT in Tanzanian businesses. It was found that IT has not substantially increased productivity in Tanzanian business organizations and that the contribution of IT in the organizational performance was not more than 2.05% from 1991 to 1995. The study also found that low IT productivity is due to low conversion effectiveness. The factors necessary to assure IT productivity are proposed and recommendations for an enabling IT environment are presented in this study.