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Detecting information technology impact on firm performance using DEA and decision tree

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  • Desheng Wu

Abstract

In a modern organisation, it is crucial and common for managers to effectively detect the impact of Information Technology (IT) on firm performance. This allows companies to maintain a competitive edge in rapidly changing business environments and outperform the competitors in the global marketplace. To detect the impact of IT on firm performance, this paper presents a generic model using Data Envelopment Analysis (DEA) and Decision Trees (DTs). The model consists of two modules: module 1 applies a two-stage DEA and classifies the IT-affected Decision Making Units (DMUs) into efficient and inefficient clusters based on the resulting efficiency scores. Module 2 utilises firm performance related data to train DT model and apply the trained DT model to new firms. Our results yield a favourable classification accuracy rate.

Suggested Citation

  • Desheng Wu, 2006. "Detecting information technology impact on firm performance using DEA and decision tree," International Journal of Information Technology and Management, Inderscience Enterprises Ltd, vol. 5(2/3), pages 162-174.
    • Handle: RePEc:ids:ijitma:v:5:y:2006:i:2/3:p:162-174
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    Cited by:

    1. Santos, Sérgio P. & Belton, Valerie & Howick, Susan & Pilkington, Martin, 2018. "Measuring organisational performance using a mix of OR methods," Technological Forecasting and Social Change, Elsevier, vol. 131(C), pages 18-30.

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