Revisiting the IT Productivity Paradox: A Technology Life Cycle Perspective

In this paper, we revisit the “IT Productivity Paradox,” which refers to the inconclusive relationship between IT investment and performance improvement found in empirical studies. We argue that the cause of the “IT Productivity Paradox” is more than empirical measurement difficulties. Based on a rather comprehensive review of the literature, we identified and contrasted three underlying theoretical perspectives of the empirical studies. We then propose a new theoretical framework toward an in-depth theoretical understanding of the paradox. Developed upon the contingency approach, the proposed framework considers the stages of technology life cycle. The framework not only can provide useful guidance for practicing managers but also potentially can resolve the “IT Productivity Paradox,” hence making a significant contribution to the literature.