THE EFFECT OF INFORMATION TECHNOLOGY IN ENHANCING BUSINESS PERFORMANCE: THE CASE OF SELECTED ETHIOPIAN INFORMATION TECHNOLOGY FIRMS

Abstract

This study's major purpose is to investigate the effect of information technology and its relationship with organizational performance, in ten (10) Ethiopian Information Technology firms. To fulfill the study's objectives, both qualitative and quantitative research methods were employed. The study has been conducted using both primary and secondary data sources. This study's sample comprised of 80 managers of varying levels from the selected organizations, equally distributed across sample size. A questionnaire was used to collect primary data, and it was presented electronically via Google Forms for data collection. A total of 75 respondents participated in the study, resulting in a response rate of 93.75%, which was deemed an adequate representation of the study's title. To choose respondents from the overall population, a method of non-probability sampling was utilized. Respondent survey data examined using frequency, descriptive, correlation, and regression analysis in SPSS version 28. The research included both an explanatory and a descriptive survey design. To describe what it is or how the situation seems, a descriptive research design was adopted, and correlation analysis was employed to demonstrate the relationship between dependent, independent, and mediating variables. The findings revealed a substantial association between IT use, IT adoption and business performance. Additionally, there is a significant association between IT investment and performance of firms. The study also indicates that IT investment considerably mediates the relationship between IT Usage, IT Adoption & firm performance. Due to the strong association between IT investment and firm performance, the study also suggests conducting additional research on information technology investment. The conclusion of the study is that in enhancing company performance, businesses should focus on IT usage, adoption, and investment rather than just one of these factors.