Information technology maturity index and profitability in the Philippine food, beverage and tobacco industry

• Main Author: Tugas, Florenz C.
• Format: text
• Published: Animo Repository 2011
• Subjects: Food industry and trade—Information technology—Philippines; Beverage industry—Information technology—Philippines; Tobacco industry —Information technology—Philippines; Information technology—Philippines; Business; Technology and Innovation
• Online Access: https://animorepository.dlsu.edu.ph/faculty_research/12885
• Institution: De La Salle University

The growing popularity of information technology (IT) governance and its perceived impact on organizational performance continues to interest the academe and the professional IT organizations (Devaraj & Kohli, 2003, IT Governance Institute (ITGI), 2007). Existing literature on IT governance primarily focus on the level of maturity, IT-business alignment, and its impact on IT performance. This study aims to determine whether a correlation exists between IT governance, represented by IT maturity indexes, and profitability. Using the CobiT framework of IT governance, 21 out of 23 publicly-listed companies belonging to the Philippine food, beverage and tobacco (FBT) industry were assessed. The IT maturity indexes derived were correlated to the earnings per share (EPS), the return on assets (ROA), and the return on equity (ROE) by applying the Spearman Rank Order Correlation. The observed t-values were then compared with the critical t-values to determine the significance of correlation at an alpha of.05. Results showed that there is a very weak negative correlation between IT maturity index and EPS. Moreover, there exists a very weak positive correlation between IT maturity index and ROA and a weak positive correlation between IT maturity index and ROE. Overall, there exists no significant correlation between IT maturity index and EPS, ROA, and ROE. Several implications, conclusions and recommendations related to the industry and the actual usage of IT resources were drawn out of these unexpected results.